BROOKMAN 


D.  C.  HEATH    8c  COMPANY 


• 


. 


FAMILY  EXPENSE  ACCOU$1 


BY 

THIRMUTHIS   A.   BROOKMAN 

FORMERLY    HEAD    DEPARTMENT    MATHEMATICS,    UPPER    AND    LOWER 
HIGH    SCHOOLS,    BERKELEY,    CALIFORNIA 


D.   C.   HEATH   &   COMPANY,   PUBLISHERS 

BOSTON  NEW  YORK  CHICAGO 


COPYRIGHT,  1914, 
BY  D.  C.  HEATH  &  Co. 
EDUCATION  DEFT* 


IG4 


PREFACE 

THIS  book  has  been  written  with  two  purposes  in  view  :  (1)  to  teach  the  "  mathematics 
of  money  "  underlying  the  simpler  processes  of  investment  and  expenditure,  and  (2)  to  solve 
a  series  of  problems  such  as  usually  arise  in  the  families  of  those  living  on  small  salaries. 

Experience  in  teaching  the  book  has  shown  that  pupils  appreciate  the  problems  which 
occur  in  connection  with  home  life  and  exercise  more  judgment  and  accuracy  in  their  solution 
than  in  those  which  occur  in  the  usual  text-book  on  arithmetic.  For  younger  pupils  the  work 
in  cross  addition,  cash  accounts,  and  bank  accounts  develops  skill  in  handling  such  sums  of 
money  as  occur  in  daily  life  and  gives  practice  in  the  use  of  business  forms  demanding  neatness 
and  common  sense.  For  older  pupils,  the  work  in  personal  and  other  accounts,  payments  on 
the  house,  mortgages,  and  insurance  exercises  their  reasoning  powers  upon  problems  of  daily 
life.  By  following  the  financial  history  of  a  family  the  pupils  develop  an  interest  in  its  wel- 
fare which  results  in  increased  time  devoted  to  arithmetic  in  order  to  find  how  the  family  fared. 

The  work  in  insurance  has  been  presented  in  simple  form  for  the  express  purpose  of  ridding 
it  of  imaginary  obscurities  and  revealing  it  as  the  safeguard  of  the  modern  home. 

Experience  has  further  shown  that  the  book  offers  a  wide  range  of  discipline  in  self-con- 
trol. The  tendency  of  the  age  to  live  up  to  and  beyond  the  limit  of  income  for  the  sake  of 
making  undue  display  diverts  attention  from  the  very  real  problems  which  arise  in  homes  whose 
maximum  earnings  are  $1200  a  year.  For  this  reason  the  Family  Expense  Account  follows 
the  fortunes  of  a  family  living  upon  a  small  salary.  The  difficulties  which  occur  are  solved  in 


PREFACE 


terms  4of 'the  'home  which  desires  the  utmost  for  its  children  in  their  larger  life  both  to-day  and 
to-morrow. 

The  details  of  daily  expenditure  for  dress,  pocket  money,  amusements,  etc.,  develop  ques- 
tions of  ethics  which  can  only  be  solved  by  recognizing  the  advantages  of  simplicity  regardless 
of  one's  neighbors'  standards,  and  emphasize  the  honesty  of  living  within  one's  income.  In 
the  famous  words  of  Mr.  Micawber  :  "  Annual  income  twenty  pounds,  annual  expenditure  nine- 
teen pounds,  nineteen  shillings  and  six-pence,  result,  happiness  ;  annual  income  twenty  pounds, 
annual  expenditure  twenty  pounds  and  six-pence,  result,  misery  !  " 

OAKLAND,  CALIFORNIA, 
June  19,  1914. 


CONTENTS 


FAMILY  EXPENSE  ACCOUNT 

FIRST  YEAR  .  .  2 

SECOND  YEAR  .  .       5 

THIRD  YEAR  .  .  9 

FOURTH  YEAR  ,  .     12 

FIFTH  YEAR  .  - .  .16 

SIXTH  YEAR  .  - .  .     23 

SEVENTH  YEAR      »"  .     30 

EIGHTH  YEAR  .  .     38 

NINTH  YEAR  43 


INTRODUCTION     .         .         .     -    L         .         .         ..        .         .  .       1 

CROSS  ADDITION          .     -    i        .         .         .         .         .         .  .       3 

HOUSE  FURNISHING    ...         .         .         .         .         .  .4 

CASH  BALANCE   .         .         .        :;        ;         .         .         .         .  .6 

POCKET  MONEY,  PERSONAL  ACCOUNTS       .         .         .         .  .  7, 8 

CASH  ACCOUNT  BOOK          .         .         •         •         •         •         •  .10 

BUYING  FOOD      .         .        .         .         .         .         .         .         .  .11 

CHECKS  AND  STUBS     .         .         .         .         .         .         .         .  .13 

MOVING  AND  INCIDENTALS          .......     14 

GARDEN  ACCOUNT       ...         .         .         .         .         .  .15 

MAKING  OUT  CHECKS          .         .         .         .         .         .         .  .17 

ESTIMATED  EXPENSES          .'        .         .         .         .         .         .  .21 

INDORSING  CHECKS      .         -.    -      .         .         .         .         .         .  .24 

BANK  STATEMENTS      .........     24 

SAN  FRANCISCO  FIRE  —  GAS  AND  ELECTRIC  METERS        .  26,  27 

INTEREST  ON  SAVINGS  —  DATE  OF  INTEREST     .         .         .  .31 

BALANCE      .         .         ...         .         .         .         .         .         .  .32 

TIME  TO  INTEREST  —  CORRESPONDING  DEPOSIT  FOR  ONE  MONTH     33 

SAFEGUARDS  CONCERNING  INVESTMENTS     .                  .         .  .39 

BUYING  A  HOME         .         .         .         .         .         .         .         .  .40 

NIGHT  WORK              V .42 

CLOTHING    .         ....         .         .         .         .         .  .44 

TAXES.         .         .         .         .         .         .                  .         .         .  .45 

TAKING  A  BOARDER   .  46 


VI 


CONTENTS 


TENTH  YEAR 
ELEVENTH  YEAR    . 


TWELFTH  YEAR     . 
THIRTEENTH  YEAR 

FOURTEENTH  YEAR 


47      INSURANCE  TO  PROTECT  THE  HOME  .         , 
50      CAR  COLLISION    .         .         .         .         ... 

ACCIDENT  INSURANCE          .         •.        .         . 
FIRE  INSURANCE          ...... 

55      KEEPING  CHICKENS     .         .         .         .         .     .  .f 

MORTGAGING  THE  HOME 
60      CHILDREN'S  ACCOUNTS         ..... 

COST  OF  A  CHILD  DURING  ONE  TERM  OF  SCHOOL 
LIFE  INSURANCE          ...... 

73      LUXURY  versus  CHARITY      ..... 

THE  OUTLOOK  FOR  THE  FUTURE 

USE  OF  INTEREST  TABLES  .... 

BLANK  FORMS  FOR  KEEPING  BUDGETS 
CASH  ACCOUNTS   .         .         .         .         . 

BANK  ACCOUNTS  ...... 

CHECKS  AND  STUBS      ..... 

INTEREST  TABLE  ...... 

PAYMENTS  ON  MORTGAGE    , 


48 
51 
52 
54 
56 
57 
61 
63 
64 
74 
76 
79 
85 
87 
89 
91 
93 
96 


FAMILY  EXPENSE  ACCOUNT 

INTRODUCTION 

THIS  book  contains  the  family  expense  accounts  of  Mr.  and  Mrs.  Frank  Woodward, 
who  were  married  in  Berkeley,  California,  in  November,  1900,  and  started  housekeeping  on 
December  first.  Mr.  Woodward  was  earning  $75  a  month  as  a  bookkeeper  in  a  hardware 
store  in  San  Francisco. 

At  the  time  of  their  marriage,  the  family  bought  the  furniture  for  a  four-room  flat,  but 
had  no  cash  in  reserve.  They  decided  to  devote  their  savings  to  the  purchase  of  their  own 
home,  but  at  the  same  time  to  spend  a  reasonable  amount  upon  books,  vacations,  concerts, 
etc.,  and  to  give  steady  support  to  church  and  charity. 

The  financial  story  of  fourteen  years  of  their  married  life  is  told  in  the  following  pages. 
The  problems  concerning  the  investment  arid  expenditure  of  their  salary  are  those  commonly 
met  at  the  present  time.  Pupils  should  study  the  book,  not  only  to  gain  skill  in  handling 
money,  but  also  to  gain  self-control  while  solving  similar  problems  which  may  occur  in  their 
own  home  life. 


FAMILY    EXPENSE    ACCOUNT 

FAMILY  EXPENSE  ACCOUNT 
FIRST  YEAH  — 1901 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SKPT. 

OCT. 

Nov. 

DEC. 

I    Household  •  1.  Rent  

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

2.  Electric  Light     .     . 

1.20 

1.15 

1.25 

1.05 

1.00 

1.00 

1.00 

1.00 

1.40 

L70 

2.00 

2.20 

3.  Gas    

2.25 

2.05 

2.10 

2.10 

2.15 

2.10 

2.00 

2.15 

1.75 

2.40 

2.70 

2.90 

4.  Fuel  

1.50 

5.00 

5.  Garbage      .... 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

6.    Help  ($1.25  a  day)  .      . 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

1.25 

2.50 

2.50 

2.50 

7.  Laundry     .... 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.40 

.75 

.75 

.75 

8.  Furnishings    .     .     . 

9.66 

.15 

.10 

1.65 

.50 

.85 

.45 

1.10 

.30 

2.55 

1.40 

1.72 

II    Food  •           9.  Food  

22.45 

20.45 

22.00 

21.75 

22.30 

21.15 

21.40 

22.42 

22.75 

21.43 

21.16 

22.14 

III.  Family:      10.  Carfare 

(to  San  Francisco) 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

3.00 

4.00 

4.00 

4.00 

11.  Health  

.15 

.45 

.65 

1.25 

1.05 

3.10 

1.00 

.85 

1.30 

.25 

.25 

.45 

12.  Accident  Insurance 

15.00 

13.  Incidentals      .     .     . 

3.05 

.50 

.35 

1.25 

.95 

1.15 

.85 

1.10 

1.40 

2.70 

3.10 

4.25 

14.  Education  .... 

.75 

.75 

3.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

2.75 

15.  Recreation  .... 

Maga- 

.50 

5.00 

1.50 

zine 

Charity 

Vacation 

Charity 

Xmas 

IV.  Religion:  16.  Church  and  Charity 

1.00 

1.00 

1.00 

3.00 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

4.00 

2.00 

V.  Personal:  17.  Clothing     .... 

.35 

.15 

.70 

1.25 

3.50 

4.17 

.85 

1.50 

16.00 

2.45 

2.10 

18.  Pocket  Money     .     . 

4.00 

2.00 

4.00 

4.00 

4.00 

4.00 

2.00 

4.00 

4.00 

2.00 

2.00 

4.00 

VI.  Savings:    19.  Savings  Bank      .     . 

16.00 

15.00 

15.00 

12.00 

16.00 

12.00 

10.00 

5.00 

12.00 

5.00 

20.  Life  Insurance    .     . 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

Salary,  $75  a  month.     Two  weeks'  vacation,  with  pay,  in  August,  spent  camping  in  the  hills. 


CROSS    ADDITION  3 

CROSS   ADDITION 

The  opposite  page  shows  the  expenses  of  the  Woodward  family  during  their  first  year. 
Each  column  shows  the  bills  that  were  paid  and  the  savings  that  were  deposited  on  the  first 
of  the  month.  It  is  most  important  to  find  the  correct  amount  of  f 

L  COLUMNS  Rows 

money  spent.     This  is  done  by  adding  the  twelve  columns,  January,  jan      $70.17         i    f  180. 

February,  etc.,  to  find  the  total  expenditure  for  each  month;  and  Feb.  2 

also  by  adding  twenty  rows  —  rent,  light,  etc.,  —  to  find  the  total  Mar.  3 

expenditure  for  each  item.     The  total  for  each  column  and  each  row  Apr> 
should  be  recorded  in  a  blank  similar  to  the  accompanying. 

Add  the  expenditures  for  the  twelve  months  to  find  the  expenses  ju]y  7 

for  the  year.     Add  the  totals  for  each  item  to  find  the  annual  ex-  Aug.  8 

pense  for  that  item.     If  the  work  is  done  correctly,  the  total  expense  Sept.  9 

by  columns  will  give  the  same  result  as  the  total  expense  by  rows.  <-)cti 


. 

This  method  of  securing  correct  results  by  adding  by  columns      Tf)tal  13 

and  by  rows  is  called  cross  addition.     In  adding  by  columns,  cover  =  14 

with  blank  paper  everything  except  the  column  to  be  added.      Use   no  scratch  15 
paper,  in  order  to  secure  speed  and  to  avoid  errors  in  copying.     In  adding  by 
rows  cover  everything  on  the  printed  page  except  the  row  to  be  added.     Add  from 

left  to  right,  first  the  cents,  next  the  dimes,  etc.     Do  not  copy  the  amounts  to  ig 

be  added  on  another  paper,  since  adding  by  rows  is  intended  to  give  a  quick  20 


method  of  testing  the  accuracy  of  adding  by  columns.  Total 


4  FAMILY  EXPENSE  ACCOUNT 

PROBLEM.  —  Find  the  monthly  expenses  for  the  first  year  and  the  total  expense.  Verify 
by  adding  the  expenses  by  items  and  show  that  their  total  is  the  same  as  the  total  of  the 
monthly  expenses. 

HOUSE   FURNISHING 

QUESTIONS.  1.  The  bills  received  January  1  showed  that  Mr.  and  Mrs.  Woodward 
spent  $9.66  in  house  furnishing.  Most  of  this  money  was  spent  in  buying  kitchen  equipment. 
Make  out  in  businesslike  form  a  bill  of  the  articles  they  might  have  bought,  using  local  prices. 
Make  the  local  discount  for  cash  and  receipt  the  bill. 

2.  Obtain  from  the  furniture  stores  prices  of  furniture  which  might  be  bought  for  a  four- 
room  flat.     Make  an  estimate  which  comes  within  $75. 

3.  What  unusual  expenses  occurred  in  August  and  October  ?     How  did  these  expenses 
affect  the  savings  bank  deposits  ? 

4.  What  unusual  item  prevented  the  family  from  depositing  money  in  the  savings  bank 
on  February  1?     Why  was  it  advisable  to  pay  $15  for  accident  insurance  instead  of  putting 
this  money  in  the  bank  ? 

5.  What  items  in  this  Expense  Account  do  not  occur  in  your  own  home  ?     Why  ?     What 
items  in  your  own  home  do  not  occur  in  the  Expense  Account  for  the  first  year  ? 

6.  A  sewing  machine  cost  $35  in  cash  or  could  be  bought  on  the  installment  plan  by 
paying  $2.50  a  month  for  a  year  and  a  half.     How  much  more  expensive  was  the  latter 
method  ? 

7.  Find  the  advantage  in  buying  a  dining-room  table  and  chairs  for  cash  instead  of  buying 
them  on  the  installment  plan. 


EXPENSES   FOR  A  YEAR 


FAMILY  EXPENSE  ACCOUNT 

SECOND   YEAR  — 1902 


JAN. 

FEB. 

MAB 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

DEC. 

I    Household  •  1    Rent      

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

2.  Electric  Light     .     . 

2.15 

2.10 

2.00 

1.80 

1.80 

1.50 

1.50 

1.50 

1.25 

1.90 

2.00 

2.10 

3.  Gas  

3.10 

2.95 

3.05 

3.00 

2.80 

2.95 

2.80 

1.80 

2.10 

3.05 

3.50 

3.50 

4.  Fuel  

5.00 

5.  Garbage     .... 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

6.    Help  (111.  25  a  day).      . 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

250 

25.00 

7.  Laundry    .... 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

2.00 

.75 

.75 

8.  Furnishings   .     .     . 

.85 

.45 

.70 

1.05 

.45 

3.00 

1.50 

2.10 

3.45 

14.20 

12.25 

3.50 

II.  Food  •           9.  Food      

21.80 

22.10 

21.95 

23.00 

21.16 

22.30 

20.05 

21.85 

24.60 

22.10 

30.10 

27.50 

III.  Family:      10.  Carfare 
(to  San  Francisco) 

4.00 

4.00 

4.00 

4.00: 

4.00 

4.00 

4.00 

3.00 

4.00 

4.00 

4.00 

4.00 

11.  Health  

.15 

.65 

.55 

.25 

.15 

.40 

.55 

1.20 

1.10 

.60 

5.05 

110.00 

12.  Accident  Insurance 

15.00 

13.  Incidentals     .     .     . 

.40 

2.35 

1.35 

.55 

1.05 

1.50 

2.05 

.65 

1.85 

5.10 

3.25 

2.05 

14.  Education  .... 

.75 

.75 

.75 

.75 

.75 

2.75 

.75 

1.75 

,75 

.75 

.75 

.75 

15.  Recreation      .     .     . 

.50 

.50 

.50 

14.00 

2.00 

Vacation 

Thk^vg. 

Xnias 

IV.  Religion  :    16.  Church  and  Charity 

1.00 

1.00 

1.00 

4.00; 

1.00 

1.00 

1.00 

1.00 

1.00 

1.00 

2.50 

1.00 

V.  Personal:  17.  Clothing    .... 

.30 

2.25 

1.50 

.40 

.75 

.50 

3.00 

4.00 

2.50 

3.00 

1.50 

.75 

18.  Pocket  Money     .     . 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

VI.   Savings:     19.  Savings  Bank      .     . 

10.00 

20.00 

15.00 

22.00 

18.00 

18.00 

15.00 

20.  Life  Insurance    .     . 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

Salary,  $80  a  month.     Two  weeks'  vacation  with  pay  in  August.     Bank  withdrawal,  $120,  December  2, 
1902.     Eldest  son,  Roland  Woodward,  born  Oct.  30,  1902. 


FAMILY  EXPENSE  ACCOUNT 


1901 

ON  HAND 

EXPENSES 

CASH  BALANCE 

Jan. 
Feb. 
Mar. 

$75.00 
79.83 

$70.17 

$4.83 

1902 

I 
ON  HAND 

II 

EXPENSES  BY 
MONTHS 

III 
CASH  BALANCE 

IV 

EXPENSES  BY 
ITEMS 

Jan. 

? 

? 

? 

1 

Feb. 

2 

Mar. 

3 

Apr. 

4 

May 

5 

June 

6 

July 

7 

Aug. 

8 

Sept. 

9 

Oct. 

10 

Nov. 

11 

Dec. 

12 

13 

14 

15 

16 

17 

18 

19 

20 

Total 

Total 

CASH  BALANCE 

In  1902,  Mr.  Woodward's  salary 
was  raised  $5.00  a  month,  so  that  on 
January  1  he  received  $80  a  month. 
This  increase  must  be  considered  when 
finding  the  "cash,  balance,"  or  the 
amount  of  cash  remaining  in  the  purse 
after  all  bills  are  paid.  Thus,  on  Janu- 
ary 1,  1901,  Mr.  Woodward  received 
$75.  With  this  money  he  paid  bills 
amounting  to  $70.17.  The  money  left 
in  his  purse,  or  his  "cash  balance,"  was 
therefore  $4. 83.  Why? 

On  February  1,  1901,  Mr.  Wood- 
ward had  on  hand  $79.83,  composed  of 
$4.83  in  cash  and  $  75  in  salary.  Subtract 
from  this  the  expenses  paid  February  1 
to  find  the  amount  of  money  that  he  had 
left. 

PROBLEM  1.  —  Find  the  cash  bal- 
ance for  each  month  of  the  first  year  by 
completing  a  table  similar  to  the  first  of 
the  accompanying. 


CASH    BALANCE  7 

PROBLEM  2.  —  Find  by  cross  addition  the  expenses  by  months  and  items  for  the  years 
1902  to  1905  inclusive,  by  completing  columns  II  and  IV  in  the  accompanying  table.  Make 
neat,  legible  figures. 

PROBLEM  3.  —  Find  by  subtracting  the  monthly  expenses  from  the  amount  on  hand,  the 
cash  balance  for  each  month  of  the  years  1902  to  1905  inclusive,  by  completing  columns  I  and 
III  in  the  accompanying  table.  Remember  that  on  Jan.  1,  1902,  the  amount  on  hand  is  com- 
posed of  $80  in  salary  and  the  cash  balance  on  Dec.  31,  1901.  Remember  also  that  beginning 
with  Jan.  1,  1902,  the  salary  was  180  a  month.  On  November  1,  1902,  the  family  drew  $120 
from  the  bank.  This  money  must  therefore  be  included  in  the  amount  on  hand. 

QUESTIONS.  1.  On  February  1, 1901,  Mr.  Woodward  found  that  his  cash  balance  should  be 
$4.83.  How  was  this  balance  found?  Suppose  that  at  this  time  he  found  in  his  purse  only 
$3.89,  what  would  he  know  concerning  the  accuracy  with  which  he  had  kept  his  accounts? 
How  much  must  then  be  entered  as  "unaccounted  for"  in  his  January  expenses?  The  skill 
of  any  one  who  keeps  accounts  is  shown  if  the  amount  of  money  in  his  purse  agrees  with  the 
amount  found  by  subtracting  his  expenses  from  his  money  on  hand.  If  these  amounts  agree, 
how  much  must  he  enter  as  "  unaccounted  for  "  ? 

POCKET  MONEY 

2.  After  looking  over  their  first  year's  expenses,  Mr.  and  Mrs.  Woodward  decided  to  reduce 
their  pocket  money.  Find  in  the  following  list  of  items  those  which  could  be  omitted  altogether 
and  those  which  could  be  reduced,  but  not  omitted.  What  other  items  could  also  be  reduced? 

Tobacco,  moving  picture  shows,  haircuts,  candy,  gum,  perfume,  ice  cream  sodas,  carfare,  face  powder, 
theatres,  peanuts,  picnics. 


8 


FAMILY    EXPENSE    ACCOUNT 


3.  Find  the  smallest  amount  of  pocket  money  that  you  would  spend  if  you  desired  to  save 
as  much  money  as  possible.  On  what  items  would  you  spend  it?  What  items  could  you 
omit  ?  For  what  objects  would  it  be  worth  while  to  reduce  the  amount  of  pocket  money  spent  ? 


PERSONAL  ACCOUNTS 

4.    Personal  expenses  for  a  single  person  may  be  kept  with  the  following  abbreviations : 
B,  board ;    L,  living  expenses  (telephones,  laundry,  etc.)  ;    T,  traveling  expenses ;   C,  clothing ;    II,  health ; 
R,  recreation  (itemize  to  avoid  extravagance);   E,  education;   A,  acquaintances;   F,  family  (itemize  large  contri- 
butions) ;  X,  church  and  charity  (itemize  to  promote  regularity)  ;  I,  investments. 

(The  first  three  items  in  the  left  column  are  recorded  only  when  opening  an  account.) 

PERSONAL  ACCOUNT 


KECKIPTS 

EXPENSES 

Items 

Received 

Date 

Items 

Paid 

Balance  in  savings  bank  .     .     

$472  40 

Dec.  31.  '14- 

c  

$      .65 

Balance  in  checking  account     

15.42 

F.  (chair,  check  No.  59). 

10.00 

Cash  on  hand      

2.35 

R.  (Melba)    

1.50 

Interest  on  savings  (left  in  bank)     .... 
Salary    (deposited   $50   in   savings,    $60   in 
checking  acc't,  cash,  $10)      

12.11 
120. 

Jan.  2.  '15 

B.  (to  Feb.  1,  check  No.  60)    .     . 
X.  (Associated  charities  No.  61). 

30.00 
5.00 

5.    Find  the  balance  in  the  savings  bank,  in  the  checking  account,  and  the  amount  of  cash 
on  hand  Jan.  3,  1915. 


EXPENSES  FOR  A  YEAR 


FAMILY  EXPENSE  ACCOUNT 
THIRD  YEAR  — 1903 


JAN. 

FEB. 

MAB. 

APR. 

MAY 

JUNK 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

D«o. 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

1  5  00 

15  00 

2.  Electric  Light      .     . 

2.30 

2.40 

2.20 

2.05 

2.00 

1.90 

1.90 

1.70 

1.25 

L90 

A  *J»\J\J 

2.15 

A.  *J»\J\r 

2.40 

'}  10 

2.80 

2.65 

2.80 

2.90 

2.95 

9  an 

2.80 

9  50 

i>  00 

310 

1  90 

4.  Fuel  

4.00 

MfVV 

4.00 

£f»*J\J 

£.U\J 

.  AU 

Otmv 

5.  Garbage      .... 

.25 

.25 

.25 

.25 

.25 

.25 

35 

.25 

.25 

.25 

.25 

.25 

6.   Help  ($1.25  a  day)    .      . 

15.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

1.25 

2.50 

2.50 

2.50 

7.  Laundry     .... 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.40 

.75 

.75 

.75 

8.  Furnishings    .     .     . 

445 

3.95 

2.10 

2.30 

1.50 

.85 

.65 

1.10 

.70 

.90 

1.40 

2.05 

II.  Food:             9.  Meat  

4.50 

3.75 

3.80 

3.50 

3.70 

3.45 

3.90 

3.85 

4.10 

3  50 

i\  QO 

4  90 

10.  Fruit     and     Vege- 

*J»*J\J 

*JtO\J 

tX*£iV/ 

tables      .... 

2.15 

3.25 

3.55 

3.25 

4.00 

3.45 

4.20 

4.30 

4.45 

3.10 

3.20 

3.45 

11.  Milk  and  Butter.     . 

:5.60 

3.00 

3.65 

3.35 

3.40 

3.70 

3.65 

3.50 

3.70 

3.65 

3.90 

o.90 

12.  Groceries    .     .    .    . 

12.38 

11.50 

13.15 

10.05 

14.95 

10.45 

11.75 

10.35 

13.25 

10.40 

13.25 

12.05 

III.  Family  Expenses  : 

Ace. 
Inn. 

Vacation 

13.  Total      

5.20 

22.05 

6.05 

5.30 

5  75 

6.40 

7.00 

5.30 

90  OT 

Q  ,'tO 

ft  'lO 

6  80 

IV.  Religion  :     14.  Church  and  Charity 

1.00 

1.00 

1.00 

4.00 

•J*  i  *J 

1.00 

1.00 

1.00 

1.00 

£\J»\/tJ 

1.00 

iy*'j\j 

1.00 

O.tJV/ 

3.00 

\jf\j\J 

1.00 

V.  Personal:     15.  Clothing 

15.00 

2.35 

1.40 

5.40 

3.25 

18.00 

1.25 

3.10 

1.50 

2.05 

1.80 

3.15 

16.  Pocket  Money     .     . 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

VI.  Savings:      17.  Savings  Bank      .     . 

16.00 

15.00 

15.00 

5.00 

14.00 

20.00 

5.00 

20.00 

14.00 

14.00 

18.  Life  Insurance    .     . 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

1.68 

Salary,  f  80  a  mouth.     Vacation  in  August. 


10 


FAMILY  EXPENSE  ACCOUNT 


CASH  ACCOUNT 


CASH   ACCOUNT   BOOK 

To  reduce  their  bookkeeping  to  the  simplest  form  possible,  Mr.  and  Mrs.  Woodward 
decided  to  keep  accounts  at  a  few  stores  and  pay  their  bills  there  by  checks  on  the  first 
of  each  month  in  order  to  avoid  spending  a  large  amount  of  cash  unconsciously.  By  this 
means  they  could  keep  a  record  of  large  items  and  only 
needed,  besides  their  check  book,  a  daily  account  of  those 
purchases  for  which  they  paid  cash.  By  comparing  the 
balance  in  the  account  book  each  night  with  the  money  in 
the  purse,  they  had  an  exact  record  of  each  cash  item.  At 
the  end  of  the  month,  the  items  in  the  check  book,  combined 
with  those  in  the  cash  account,  were  added  and  entered  in 
the  Family  Expense  Account,  as  on  the  preceding  page. 

PROBLEM  1. — The  family  cash  account  for  one  week 
showed  the  following  items.  Enter  in  a  form  similar  to  the 
accompanying,  and  find  the  cash  balance  for  each  day. 

Mon.  Jan.  9 — Cash  in  purse,  $3.40;  Absorbent  cotton, 
1.10;  Pencil,  $.05.  Tues.  —  Sold  rags,  $.15;  Writing 
paper,  $.20;  Nozzle  for  hose,  $.35.  Wed. — Received  for 
piano  lessons,  $2.50;  Repairing  shoes,  $.90.  Thurs. — 
Umbrella,  $2;  Rubbers,  $.75.  Fri.  —  Barber,  $.35.  Sat. 
—  Glasses  repaired,  $.70;  Electric  iron  repaired,  $.30. 

PROBLEM  2.  — Make  out  a  similar  account  for  one  week 


DATE 

PARTICULARS 

KEO'D 

PAID 

Mon. 

Jan.  2 

On  Hand              $5.00 

1  doz.  Oranges 

$  .20 

Stamps 

.10 

Total 

5.00 

.30 

Tues. 

Jan.  3 

Cash  Balance 

4.70 

Bottles  Sold 

.25 

Paring  Knife 

.20 

Total 

4.95 

.20 

Wed. 

Jan.  4 

Cash  Balance 

4.75 

Garbage 

.25 

of  the  cash  expenditures  of  your  own  home  and  find  the  balance  for  each  day. 


BUYING  FOOD  11 

BUYING  FOOD 

During  their  third  year,  Mr.  and  Mrs.  Woodward  tried  to  reduce  the  cost  of  food  by 
buying  in  large  quantities.  They  found  that  on  a  large  scale  this  required  more  space  for 
storage  than  they  had  in  their  present  home.  They  therefore  decided  to  move  and  also  to 
start  a  garden  as  soon  as  possible.  They  then  found  that  when  they  bought  much  of  any 
article  they  were  more  extravagant  in  its  use  and  wasted  the  profit  that  they  had  made. 
They  finally  decided  to  buy  groceries  in  large  quantities,  and  to  measure  out  a  week's  supply 
and  live  within  this  allowance.  They  distributed  their  purchases  so  that  they  bought  a  large 
order  of  one  commodity  every  two  months :  January,  soap  and  laundry  supplies ;  March,  sugar 
for  preserving ;  May,  potatoes ;  July,  fuel  (brought  from  the  mountains  in  cooperation  with 
the  neighbors)  ;  September,  dried  fruit ;  November,  canned  goods. 

QUESTIONS.  1.  Find  the  total  cost  of  food  in  your  own  family  for  one  month,  classified 
as  in  items  9, 10, 11,.  12  on  the  following  page,  and  thus  find  the  average  cost  of  food  per  person 
per  month. 

2.  Use  local  prices  to  find  the  cost  of  wasting  half  a  cup  of  butter  a  day. 

3.  Compare  the  cost  of  a  roast  of  meat  which  can  be  served  for  four  meals,  with  the  cost 
of  buying  different  meats,  steak,  chops,  etc.,  for  each  of  the  four  meals. 

4.  If  sugar  is  bought  by  the  barrel  in  March,  and  the  family  already  has  fruit  jars,  use 
local  prices  to  find  the  difference  in  expense  between  buying  two  dozen  pint  jars  of  canned 
blackberries  and  between  preserving  them  at  home.     Find  the  cost  of  labor  per  hour,  include 
this  in  the  bill  for  fruit  canned  at  home,  and  again  compare  the  difference  in  cost. 

5.  Use  local  prices  to  find  the  difference  in  cost  between  buying  bread  at  the  bakery  and 
making  it  at  home ;  include  the  cost  of  labor  in  the  bill  for  home-made  bread. 


12 


FAMILY    EXPENSE    ACCOUNT 


FAMILY  EXPENSE  ACCOUNT 
FOURTH  YEAR  — 1904 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

DEC. 

I.  Household:    1.  Rent      

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

2.  Electric  Light     .     . 

2.50 

2.40 

2.40 

2.30 

1.10 

1.40 

1.20 

1.10 

1.00 

2.00 

2.40 

2.25 

3.  Gas        

2.90 

2.75 

2.70 

2.40 

3.00 

2.85 

2.00 

2.00 

1.50 

2.50 

2.85 

3.10 

4.  Fuel      

10.00 

5.  Garbage     .... 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

6.   Help  ($1.25  a  day)       . 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

2.50 

1.25 

2.50 

2.50 

2.50 

7.  Laundry    .... 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.40 

.75 

.75 

.75 

8.  Furnishings  .     .     . 

3.15 

1.25 

7.40 

12.65 

4.65 

2.50 

7.65 

4.22 

1.40 

2.90 

3.60 

3.15 

New  rug 

II.  Food:             9.  Food     

22.30 

22.05 

21.75 

22.65 

22.70 

20.60 

20.40 

21.30 

20.40 

23.50 

24.10 

23.95 

III.  Family:        10.  Carfare 

(to  San  Francisco) 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

3.00 

4.00 

4.00 

4.00 

11.  Health  

.25 

.65 

6.05 

2.85 

1.30 

.10 

1.95 

1.85 

.95 

1.40 

2.10 

3.05 

12.  Accident  Insurance 

Moving 

15.00 

Seeds 

13.  Incidentals    .     .     . 

18.00 

1.05 

4.10 

3.25 

2.40 

2.65 

1.10 

3.40 

2.50 

1.50 

3.15 

2.75 

14.  Education      .     .     . 

1.50 

.75 

.75 

.95 

1.10 

.85 

2.50 

.75 

.75 

.75 

1.25 

52.00 

15.  Recreation     .     .     . 

.50 

1.00 

.50 

.50 

.50 

12.00 

.50 

.60 

2.00 

Vacation 

IV.  Religion:      16.  Church  and  Charity 

1.50 

1.50 

1.50 

5.00 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

3.00 

2.00 

V.  Personal:      17.  Clothing    .... 

1.10 

.15 

3.19 

4.25 

10.25 

15.60 

3.40 

5.90 

2.10 

3.15 

16.00 

12.65 

18.  Pocket  Money   .     . 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

VI.  Savings:        19.  Savings  Bank     .     . 

6.00 

9.00 

10.00 

8.00 

8.00 

5.00 

15.00 

15.00 

15.00 

20.  Life  Insurance  .     . 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

Salary,  $85  a  month.     Moved  January  1  to  cottage  with  garden. 


CHECKS  AND   STUBS 


13 


CHECKS   AND   STUBS 

[See  also  page  17.] 

Mr.  and  Mrs.  Woodward  planned  to  pay  as  many  of  their  bills  as  possible  on  the  first  of 
the  month  by  checks.  This  meant  that  they  kept  two  kinds  of  accounts  at  the  bank,  the 
savings  bank  account  (explained  later),  and  a  checking  (commercial)  account.  They  opened 
a  checking  account  by  depositing  a  certain  amount  of  money  in  the  bank  and  receiving  a  check 

book  filled  with  blank  checks  and  stubs.  The 
stub  of  a  check  is  the  piece  of  paper  which  re- 
mains in  the  book  after  the  check  is  torn  out 
and  which  shows  how  much  money  the  check  is 
made  out  for  and  how  much  money  remains  in  the 
bank.  When  the  stubs  are  kept  correctly,  they 
form  an  account  book  from  which  the  monthly 
expenses  paid  by  check  can  be  recorded.  Sup- 
pose that  Mr.  Woodward  had  $100  in  his 
checking  account  on  January  1,  1904.  If  he 
had  used  60  checks  before  this  time,  his  first 
check  in  January  would  be  No.  61,  and  the  stub 
would  be  filled  out  as  in  the  accompanying 
blank.  In  check  No.  62,  why  would  the  bal- 
ance brought  forward  on  the  stub  be 


No. 

61                            A  15 

Jan.  2,  1904 

To 

Lawrence  8c  Brown 

For 

House  rent 

Bed.  Brought  Forward 
Amount  deposited 

Total 
Amount  this  check 

Balance 

$100 

100 
15 

85 

PROBLEM  1.  —  Find  the  amount  in  the  budget,  and  make  out  the  stub  of  check  No.  62  for  the 
electric  light  bill  due  Jan.  1, 1904.    What  balance  is  brought  forward  to  the  stub  of  check  No.  63? 


14  FAMILY  EXPENSE  ACCOUNT 

PROBLEM  2.  —  Use  the  correct  and  constantly  decreasing  balance  in  making  out  the  stubs 
of  the  following  checks  for  the  bills  paid  Jan.  1,  1904 :  No.  61,  Rent ;  No.  62,  Electric  light ; 
No.  63,  Gas ;  No.  64,  Help ;  No.  65,  Laundry ;  No.  66,  Furnishings  (use  name  of  a  local  hard- 
ware store).  Find  the  balance  left  in  the  checking  account  after  these  bills  are  paid. 

PROBLEM  3.  —  Get  a  check  book  from  the  bank  and  make  out  the  correct  stubs  for  bills 
paid  in  your  own  home  on  the  first  of  the  month  for  the  same  items  as  above.  Find  the  re- 
maining balance.  Explain  why  it  is  the  height  of  folly  to  make  out  a  check  without  making 
out  the  stub. 

MOVING   AND   INCIDENTALS 

QUESTIONS.  — 1.  On  Jan.  1,  1904,  the  Woodward  family  moved  to  a  cottage  for  which 
they  paid  $15,  including  water.  The  deposits  on  their  gas  and  electric  meters  were  trans- 
ferred without  extra  expense.  The  plumber's  bill  for  connecting  the  stove  was  $3.50,  and  the 
moving  bill  was  $15.  Among  the  extra  furnishings  required  for  the  new  home  were  the 
following.  Find  the  local  prices  for  these  and  the  total  expense  :  One  5"  pipe  collar;  6  screw 
hooks  and  eyes ;  3  washers ;  |  pt.  wood  dye ;  damper ;  monkey  wrench ;  1  gal.  floor  paint ; 
2  window  shades,  30"  wide,  5  ft.  long ;  dustless  mop ;  4  casters ;  putty ;  glazier's  points ; 
1  piece  glass,  14f  "  x  18"  ;  1  piece,  26"  x  27" ;  for  window  screens,  17  ft.  of  30"  screen, 
1  package  -|  brads;  plane,  $2. 

2.  At  the  end  of  the  year  the  family  discovered  that  although  they  had  been  receiving  a 
larger  salary  than  before,  they  had  been  putting  less  money  in  the  savings  bank.  What  large 
items  of  expense  did  they  find  in  January,  April,  May,  June,  September,  November,  and 


GARDEN  ACCOUNT  15 

December  ?  They  decided  to  watch  their  expenditures  for  house  furnishing  and  incidentals, 
and,  if  possible,  to  reduce  these  items  during  the  next  year.  Find  the  total  cost  of  the  follow- 
ing furnishings  and  incidentals,  and  show  wherein  savings  could  be  effected:  Films  and  print- 
ing, $.95;  gas  stove,  $2.25 ;  curtains,  $.60 ;  crockery,  $3.30;  tablecloth,  $2.;  desk  fixtures, 
$.50;  watch  repairing,  $1.50;  plumbing,  $7.50;  electric  battery,  $.35;  electric  light,  $.50; 
saws  filed,  $.75. 

3.  Keep  a  list  of  house  furnishings  and  incidental  expenses  in  your  own  home  for  one 
month,  and  see  what  fraction  they  form  of  the  entire  outlay. 

GARDEN    ACCOUNT 

In  1904,  Mr.  and  Mrs.  Woodward  started  a  garden  in  which  they  grew  flowers,  beans, 
potatoes,  blackberries,  loganberries,  raspberries,  and  strawberries.  In  October  they  planted 
bulbs.  The  garden  yielded  fruit  and  vegetables,  as  follows  :  July,  $5;  August,  $7  ;  Sept.,  $3. 
Notice  how  the  food  bill  is  diminished  on  account  of  the  profit  made  from  the  garden.  Make 
out  an  account  for  the  garden  similar  to  the  account  for  chickens  on  page  56,  and  insert  reason- 
able prices  to  show  its  expenses  and  profits. 

PROBLEM  4.  —  In  a  garden  40  ft.  square,  the  annual  expenses  were  as  follows  :  Seed,  $  2  ; 
fertilizer,  $  1  ;  labor,  $  10  ;  extra  water,  $  2.  During  the  winter  the  returns  from  lettuce, 
radishes,  beets,  onions,  peas,  and  potatoes  were  $22.50.  The  corn  crop  was  a  failure.  The 
garden  yielded  other  vegetables  from  April  until  October  and  potatoes  throughout  the  winter. 
Find  the  average  profit  per  month. 

PROBLEM  5.  —  Keep  an  account  of  your  own  garden  to  find  its  monthly  profit  for  a  year. 
What  other  advantages  arise  from  keeping  a  garden  ? 


16 


FAMILY    EXPENSE    ACCOUNT 


FAMILY  EXPENSE  ACCOUNT 
FIFTH  YEAR  — 1905 


JAN. 

FEB. 

MAI:. 

APE. 

MAT 

JUNE 

JULY 

Airs. 

SEPT. 

OCT. 

Nov. 

DEO. 

I.  Household:     1.  Rent  

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

2.  Electric  Light     .     . 

2.20 

2.15 

2.25 

3.25 

3.15 

2.40 

2.10 

1.75 

1.25 

1.95 

2.05 

2.15 

3.  Gas    

2.85 

2.90 

2.95 

3.50 

4.00 

3.50 

3.25 

3.10 

2.10 

2.50 

2.80 

2.95 

4.  Fuel  

5.00 

10.00 

5.  Garbage      .... 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

6.    Help  ($1.25  a  day)  .      . 

2.50 

2.50 

2.50 

15.00 

25.00 

2.50 

2.50 

2.50 

1.25 

2.50 

2.50 

2.50 

7.  Laundry     .... 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

8.  Furnishings    .     .     . 

1.25 

2.75 

1.65 

12.25 

2.85 

1.50 

1.00 

1.25 

2.70 

3.19 

2.10 

Linen 

3.10 

II.  Food:             9.  Food      

24.05 

23.85 

24.10 

31.60 

35.47 

27.40 

22.20 

21.10 

25.14 

26.14 

25.10 

24.00 

III.  Family:        10.  Carfare 

(to  San  Francisco) 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

11.  Health  

.35 

.70 

.53 

6.25 

110.00 

1.10 

1.15 

.95 

.72 

.47 

2.05 

1.50 

12.  Accident  Insurance 

15.00 

Linen 

13.  Incidentals     .     .     . 

.48 

.97 

7.04 

3.05 

2.85 

2.40 

1.80 

2.15 

1.16 

2.27 

3.05 

1.05 

14.  Education  .... 

.75 

.75 

.75 

.75 

.95 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

15.  Recreation      .     .     . 

.15 

.10 

.20 

.30 

.20 

.50 

.30 

1.00 

.50 

2.50 

IV.  Religion:      16.  Church  and  Charity 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

3.00 

1.50 

V.  Personal:     17.  Clothing     .... 

13.50 

1.05 

4.10 

6.05 

3.20 

5.00 

12.00 

6.00 

15.00 

10.27 

5.20 

4.10 

18.  Pocket  Money     .     . 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

VI.  Savings:       19.  Savings  Bank      .     . 

8.00 

10.00 

15.00 

20.00 

8.00 

9.00 

14.00 

20.  Life  Insurance    .     . 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

Salary,  $85  a  month.     Eldest  daughter,  Frances  Woodward,  born  March  16,  1905. 
Bank  withdrawal,  f  140,  May  1,  1905. 


17 


A  check  is  a  slip  of  paper  printed  about  as  the  accompanying.     To  draw  a  check  it  is 
necessary  to  write  (1)  the  date,  (2)  No.  of  check,  (3)  person  in  whose  favor  it  is  made  out, 

BERKELEY,  CAL.__  191_      No. 


THE  FIRST  NATIONAL  BANK 
OF  BERKELEY,  CAL. 


PAY  TO  THE 

OHDER  O 


_DoLLARS 


(4)  amount  of  check  in  figures,  (5)  amount  of  check  in  words,  (6)  signature  of  person 
making  out  the  check.  Find  the  place  where  each  of  these  items  should  be  written  in  the 
above  check. 

When  you  have  made  out  a  check  to  Lawrence  &  Brown  for  $10.25,  house  rent,  and  have 
signed  your  name,  they  can  send  the  check  to  the  bank  and  receive  $10.25.  But  if  you  have 
signed  the  check  when  you  had  no  money  in  the  bank,  you  can  be  put  into  prison.  It  becomes 
necessary,  therefore,  never  to  sign  a  check,  even  in  practice,  if  you  have  no  money  in  the  bank, 


18  FAMILY  EXPENSE  ACCOUNT 

unless  the  word  Void  is  written  prominently  across  the  writing  on  the  check.  The  most  im- 
portant word  that  any  person  writes  is  his  signature.  He  cannot  be  too  careful  how  he  safe- 
guards this.  Never  sign  any  paper  which  you  do  not  thoroughly  understand.  Each  person  should 
adopt  a  practical  business  signature  which  includes  the  name  by  which  he  is  generally  known 
and  the  initials  of  his  other  names.  This  signature  he  should  not  vary  when  signing  business 
papers.  It  should  always  be  written  legibly  in  ink  or  indelible  pencil.  Why  ? 

BERKELEY,  CAL._  _n.  2 190  ¥  No. 6/ 


THE  FIRST  NATIONAL  BANK 
OF  BERKELEY,  CAL. 


PAT  TO  THE 

ORDER  OF 


A  number  of  cautions  should  always  be  observed  in  writing  checks. 

1.  In  writing  the  amount  of  the  check  in  numbers,  place  the  left  number  close  to  the 
dollar  mark,  otherwise  the  amount  of  the  check  might  be  raised.  If  a  check  for  ten  dollars  is 
written  $  10. f^  instead  of  $10.^,  it  is  possible  for  a  thief  to  insert  another  number  between 
the  f>  sign  and  the  number,  as  $  710,  and  the  signer  of  the  check  might  lose  $  700.  Why  ? 


MAKING    OUT    CHECKS  19 

2.  Place  the  numbers  that  show  the  amount  of  the  check  close  together  to  prevent  some 
one  else  from  inserting  a  number  between  them.     A  check  for  ten  dollars  must  be  written 
$  10.^55  and  not  $  1  0.^,  as  in  the  latter  case  the  number  7  might  be  inserted  so  that  the  check 
would  read  $170.^.     How  much  money  might  the  signer  then  lose? 

3.  Make  a  dash  immediately  after  the  last  number  of  dollars  to  prevent  a  number  being 
inserted  before  the  cents.     A  check  for  ten  dollars  must  be  written  $10  —  and  not  $10  —  as 
in  the  latter  case,  the.  zero  might  be  inserted  so  that  the  check  would  read  f>  100 — .     How 
much  money  might  the  signer  then  lose  ? 

4.  In  writing  the  amount  of  the  check  in  numbers,  make  the  dash  immediately  after  the 
last  figure  in  the  number  of  dollars,  and  write  the  number  of  cents  in  small  numbers  above  the 
dash ;  write  100  below  the  dash.     If  the  check  is  for  an  exact  numbe-r  of  dollars,  write  No 
above  the  dash  and  100  below  ;  as  $5.j^. 

5.  In  writing  the  amount  of  the  check  in  words,  begin  at  the  extreme  left  end  of  the  line 
to  avoid  any  one  else's  raising  the  amount  of  the  check.     If  a  check  for  five  dollars  is  written 

Five  and—     Dollars,  the  word  Sixty  might  be  inserted  thus  : 

Sixty-Five  and  —     Dollars.     How  much  money  might  the  signer  of  the  check  lose  ? 

The  check  should  be  written  correctly  thus  : 
Five  and  22.  Dollars. 

100" 

6.  In  writing  the  amount  of  the  check  in  words,  the  word  and  should  be  written  imme- 
diately after  the  number  of  dollars  in  the  check.     If  a  space  is  left  before  the  word  and,  the 
amount  of  the  check  might  be  raised.     Thus  : 

Seven     and—                    Dollars  might  be  raised  to  Seventy  and^  Dollars. 

100 &  y          100 


20  FAMILY  EXPENSE  ACCOUNT 

How  much  money  might  the  signer  of  the  check  lose  ?     The  check  should  be  written  correctly, 
thus,  Seven  and  ^  -  -•  Dollars. 

7.  In  writing  the  amount  of  the  check  in  words,  if  it  is  for  an  exact  number  of  dollars, 

write  — —  after  the  word  and,  and  leave  no  space  between.     What  two  safeguards  does  this 

insure  ? 

8.  After  writing  in  words  the  number  of  dollars  in  the  check,  and  in  figures  the  cents  in 
the  check,  draw  a  line  from  this  amount  to  the  word  Dollars.     Why  ? 

The  preceding  cautions  are  necessary,  because  a  check  is  an  order  to  pay  money,  and  the 
person  who  orders  payment  must  be  sure  that  he  protects  himself  in  every  way  possible  from 
paying  an  amount  that  he  did  not  intend.  The  check  and  stub  for  the  electric  light  bill  for 
Jan.  1,  1904,  would  read  as  shown  at  the  top  of  p.  21. 

PROBLEM  1.  —  Suppose  that  Mr.  Woodward  has  $95  in  his  checking  account  on  Feb.  1, 
1905,  and  has  already  issued  123  checks.  Make  out  stubs  and  checks  for  each  of  the  following 
bills,  paid  Feb.  1,  in  the  following  order.  Use  the  names  of  local  firms  and  write  the  word 
Void  across  the  face  of  each  check :  1,  Rent ;  2,  electric  light ;  3,  gas ;  4,  help ;  5,  laundry ; 
6,  furnishings;  7,  meat;  8,  fruit  and  vegetables;  9,  milk  and  butter;  10,  groceries;  11,  drug 
store;  12,  accident  insurance;  13,  newspaper;  14,  church;  15,  clothing;  16,  life  insurance. 

PROBLEM  2.  —  Make  out  a  similar  series  of  checks  and  stubs  (see  blanks  at  end  of  book) 
using  the  bills  of  your  own  home  and  the  check  book  of  your  own  bank.  Write  the  word  Void 
across  the  face  of  each  check.  Show  the  checks  and  stubs  to  a  banker  to  see  if  they  are  cor- 
rectly made  out. 


ESTIMATED   EXPENSES 


21 


STUB                                                                                           CHECK 

No.      62                 $      2.  so 

BERKELEY,  CAL  Jan.  2  —  190_4_     No.-fe— 

THE  FIRST  NATIONAL  BANK 
OF  BERKELEY,  CAL. 

PAY  TO  THE 
ORDF.R  OF               Berkeley  Electric  Lighting  Co                »p      2,  50 

Jan.  2.                190  4 

Jo  Berkeley  Electric  Lighting  Co. 
FOR                elec.  light 

BAL.   BROT.   FORD. 

AMT.  DEPOSITED 
TOTAL 
AMT,  THIS  CHECK 
BALANCE' 

DOLLARS 
85 

CENTS 

85 

Two  and  ^                                                                                DOLLARS 

2 

50 

John  Doe 

82 

50 

ESTIMATED   EXPENSES 

Mr.  and  Mrs.  Woodward  had  been  in  the  habit  of  spending  what  seemed  a  reasonable 
amount  for  each  item  and  depositing  in  the  savings  bank  as  much  as  possible  of  what  was  left 
from  each  month's  expenses.  As  they  looked  over  their  accounts  for  five  years,  however,  they 
realized  that  their  savings  were  not  increasing  as  rapidly  as  they  wished.  Because  they 
wanted  to  own  their  home,  they  decided  to  form  an  estimate  of  the  amount  that  they 
would  spend  upon  each  item  and  compel  themselves  to  live  within  this  amount.  They  began 


22  FAMILY    EXPENSE    ACCOUNT 

to  realize  that  if  they  saved  only  what  was  left  after  the  month's  bills  were  paid,  they  would 
spend  more  than  if  they  decided  to  set  aside  a  certain  definite  amount  each  month.  They 
therefore  made  up  the  following  estimate  of  their  year's  expenses  in  order  to  find  how  much  they 
could  save:  Rent,  $180;  electricity,  $27  ;  gas,  $37;  fuel,  $15;  garbage,  $3  ;  help,  $30  ;  laun- 
dry, $9;  furnishings,  $50 ;  food,  $300;  carfare,  $48;  accident  and  life  insurance,  $65.24; 
incidentals,  $30;  church  and  charity,  $20;  clothing,  $100;  pocket  money,  $18.  They  con- 
sidered that  they  could  live  comfortably  within  this  estimate.  When,  however,  they  found  the 
total,  they  realized  that  they  had  only  a  small  sum  left  and  that  some  of  this  money  would  be 
spent  on  education,  recreation,  and  health,  thus  reducing  their  savings  to  almost  nothing. 

QUESTIONS.    1.   Find  the  amount  of  money  that  could  be  devoted  annually  in  the  above  esti- 
mate to  education,  recreation,  and  health. 

2.  The  family  decided  that  the  most  rigid  economy  was  necessary  if  they  were  to  save 
money  toward  buying  a  home,  so  looked  over  the  monthly  expenses  to  see  which  items  could 
not  possibly  be  reduced.     Make  a  list  of  items  1,  5,  7,  10,  12,  16,  18,  20,  and  find  their  total. 

3.  They  decided  to  cut  down  the  electric  light  bill  to  $1.70  a  month;  gas,  $2.80;  fuel,  $15  ; 
education,  $.75;  food,  $22;  and  furnishings,  health,  recreation,  incidentals,  and  clothing  to  a 
total  of  $  14  between  them.     If  health  required  a  large  outlay,  then  the  clothing,  furnishing,  rec- 
reation, and  incidentals  must  be  slighted  until  another  month.     Find  how  much  the  family 
can  deposit  in  the  savings  bank  eacli  month  if  they  live  within  this  estimate. 

4.  Read  the  budget  for  the  sixth  year  and  see  how  near  Mr.  and  Mrs.  Woodward  kept  to 
their  estimate. 

5.  Make  out  estimates  for  your  family  expenses  on  blanks  at  the  end  of  the  book. 


EXPENSES    FOR    A    YEAR 


23 


FAMILY  EXPENSE   ACCOUNT 
SIXTH  YKAR  — 1906 


JAN. 

FEB. 

MAK. 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

DEO. 

I.  Household  •     1.  Rent  

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15.00 

15  00 

1  5  ftft 

1  r.  oo 

1  ^  Oft 

1  ^  ftft 

2.  Electric  Light     .     . 

1.62 

1.71 

L53 

1.50 

1.08 

1.08 

L17 

JL*J*\J\/ 

1.26 

1  iJt\J\J 

1.53 

1«J.UU 

1.62 

1  *J.UU 

1.53 

1O.UU 

1.71 

3.  Gas   

2.88 

2.63 

2.88 

2.52 

2.07 

9  ()7 

2.28 

2  43 

9  43 

9  7ft 

9  V) 

9  88 

4.  Fuel       

5.00 

mjnWt 

10.00 

A«W 

—  .   t  •  I 

£•<  U 

fi*VA 

.s.oo 

5.  Garbage     .... 

.25 

.25 

.25 

.25 

.25 

.25 

.25 

-.25 

.25 

.25 

.25 

.25 

6.    Help  ($  2  a  day)       .      . 

2.50 

2.50 

2.50 

2.50 

1.25 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

7.  Laundry 

.75 

.75 

.75 

.75 

.40 

1.20 

1.20 

1.20 

1.20 

1.20 

1.20 

8.  Furnishings   .     .     . 

.15 

.25 

4.25 

4.00 

2.50 

3.10 

4.11 

1.10 

2.09 

II.  Food:              9.  Food      .     .'   .     .     . 

22.00 

22.00 

21.10 

21.80 

19.00 

18.00 

22.00 

21.64 

23  35 

99  1* 

9%  1ft 

94.  ftft 

III.  Family:        10.  Carfare 

£itJftJ*J 

to«*AV 

**tjf±\j 

—  ^.UU 

(to  San  Francisco) 

4.00 

4.00 

4.00 

4.00 

.50 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

11.  Health  

.10 

.25 

3.25 

4.10 

.27 

.40 

5.10 

1  1ft 

12.  Accident  Insurance 

15.00 

J.  •  1  \J 

13.  Incidentals     .     .     . 

.15 

.10 

3.10 

.45 

.52 

.60 

1.40 

.50 

3.10 

.40 

6.04 

14.  Education  .... 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

.75 

15.  Recreation      .     .     . 

15 

.50 

1.00 

1.00 

1.20 

.50 

.30 

2.50 

IV.   Religion:       16.  Church  and  Charity 

1.50 

1.50 

1.50 

1.50 

4.00 

1.50 

1.50 

1.50 

4.00 

Xrnas 

2.00 

V.  Personal:      17.  Clothing     .... 

18.00 

6.50 

5.50 

6.00 

.15 

6.00 

7.15 

1.15 

9.40 

14.00 

1.73 

18.  Pocket  Money    .     . 

1.50 

1.50 

1.50 

1.50 

.70 

.35 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

VI.  Savings:        19.  Savings  Bank      .     . 

10.00 

10.00 

10.00 

15.00 

10.00 

25.00 

24.00 

22.00 

18.00 

20.00 

20.  Life  Insurance   .     . 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

Salary,  $85  a  month  through  April  1.     Salary,  May  1,  $40,  due  to  San  Francisco  fire,  April  18.     No  work  in 
May.     Drew  $60  from  savings,  June  1.     Salary  June  1,  $95  a  month,  due  to  increased  hardware  trade  after  fire. 
PROBLEM.  —  Find  cash  balance  at  end  of  year. 


24  FAMILY    EXPENSE    ACCOUNT 

INDORSING   CHECKS 

The  real  estate  company  received  a  check  for  $  15  from  Mrs.  Woodward  on  January  2  for 
rent.  It  presented  the  check  with  its  other  checks  at  the  receiving  window  of  the  bank  to  be 
deposited  to  its  account.  The  receiving  teller  turned  the  check  over  to  see  whether  it  was 
properly  "indorsed";  that  is,  whether  the  real  estate  company  had  written  its  name  across  the 
left  end  of  the  back  of  the  check.  The  teller  found  the  name,  Berkeley  Real  Estate  Co., 
properly  indorsed  by  John  Doe,  Treasurer,  and  accepted  the  check. 

The  bank  clerk  found  that  the  Woodwards'  checking  account  contained  $75,  gave  $15  to 
the  real  estate  company,  charged  the  same  to  the  Woodward  account,  and  noted  the  fact  that 
the  balance  was  now  $  60.  The  next  day  the  proprietor  of  the  clothing  establishment  turned  in 
a  check  signed  by  Mrs.  Woodward  for  $  18.  He  was  careful,  however,  not  to  indorse  the  check 
until  he  reached  the  bank.  Supposing,  therefore,  that  he  had  lost  the  check  before  he  reached 
the  bank,  no  one  else  could  have  lawfully  cashed  it  because  his  signature  was  not  on  the  back. 
To  insure  against  possible  loss  of  checks,  it  is  a  safe  rule  never  to  indorse  a  check  until  you  reach 
the  place  where  you  are  going  to  cash  it,  since  no  check  can  be  cashed  until  it  is  indorsed. 

BANK  STATEMENTS 

During  the  month,  the  checks  which  had  been  paid  to  the  various  tradesmen  gradually 
reached  the  bank  and  were  charged  to  the  Woodward  account.  On  February  1,  Mrs.  Wood- 
ward called  at  the  bank  and  asked  for  her  "statement."  This  was  a  long  envelope  containing 
all  the  checks  that  she  and  her  husband  had  written  during  the  month  of  January  and  which 


BANK    STATEMENTS 


25 


had  been  cashed  by  the  bank, 
as  follows  : 


On  the  outside  of  the  envelope  was  a  statement  of  their  account 


When  Mrs.  Woodward  received  her  statement, 
she  looked  at  the  last  figure  in  the  right-hand 
column.  To  her  surprise,  instead  of  finding  it  $28, 
as  the  stub  of  their  check  book  had  led  her  to  expect, 
she  found  that  it  was  $28.75  and  supposed  that  she 
was  75^  richer  than  she  had  thought.  When  she 
came  to  investigate,  however,  she  learned  differently. 
She  found  that  the  balance  brought  forward 
Dec.  31,  1905,  agreed  with  the  amount  on  her  stub. 
(&)  How  much  was  this  ?  (i)  How  much  was 
deposited  Jan.  2  ?  (<?)  What  was  now  the  balance 
in  the  bank  ? 

She  found  in  the  envelope  the  check  for  rent  and  made  a  mark  on  its  stub  to  show  that  it 
had  been  cashed  at  the  bank.  How  much  money  did  her  balance  now  show  ? 

She  looked  on  the  outside  of  the  envelope  again  and  found  that  the  next  check  that 
reached  the  bank  was  $18.  For  what  item  had  this  money  been  paid?  (5)  What  balance 
now  remained  in  the  bank  ? 

She  marked  the  $18  stub  and  found  that  the  next  check  was  for  $1.62.  She  marked  the 
stub,  calculated  the  balance,  and  found  that  the  bank  had  subtracted  correctly.  What 
balance  now  remained  in  the  bank  ? 

She  took  each  check,  marked  its  corresponding  stub  and  calculated  the  balance.     When 


CHECKS 

DATE 

DEPOSITS 

BALANCE 

Dec.  31,  '05 

Balance  fwd. 

$   2.75 

Jan.    2,  '06 

Deposit,  $  72.25 

75. 

115. 

Jan.    3 

60.' 

18. 

Jan.    4 

42. 

1.62 

Jan.    5 

2.88 

Jan.    5 

37.50 

2.50 

Jan.  10 

35. 

4.00 

Jan.  17 

31. 

1.50 

Jan.  19 

29.50 

.75 

Jan.  20 

28.75 

26  FAMILY  EXPENSE  ACCOUNT 

she  had  marked  each  check  on  the  stub,  she  found  that  the  bank  showed  her  balance  to  be 
$28.75,  yet  her  stub  showed  it  to  be  only  $28.  She  therefore  went  over  all  her  stubs  and 
found  that  there  was  one  stub  for  $.75  which  she  had  not  marked  because  the  check  had  not 
yet  been  returned  to  the  bank.  The  laundry  company  had  not  yet  turned  in  the  check.  She 
knew,  however,  that  it  would  reach  the  bank  later  and  would  reduce  the  balance  to  $'28. 
When  the  balance  on  the  bank  statement  does  not  agree  with  the  balance  in  the  stub  book,  look  up  the 
stub  of  each  check  to  find  which  checks  have  not  yet  been  paid  out  of  your  account  at  the  bank. 
Never  consider  that  you  have  as  much  money  in  the  bank  as  the  bank  balance  states,  if  there 
are  checks  that  you  have  signed  that  have  not  yet  been  cashed. 

PROBLEM  1.  —  Get  your  home  bank  statement  for  one  month,  and  compare  the  checks 
given  to  you  in  the  envelope  at  the  bank  with  the  bank  statement  of  the  balance. 

PROBLEM  2.  —  Compare  the  checks  with  the  stubs  and  note  on  their  stubs  the  checks  that 
have  been  returned.  Find  the  stubs  of  the  checks  that  have  not  yet  been  cashed,  and  find  the 
total  amount  for  which  you  have  drawn  checks  that  you  have  not  paid. 

PROBLEM  3.  —  Deduct  the  total  of  unpaid  checks  from  the  balance  on  the  bank  statement, 
and  show  that  the  remainder  agrees  with  the  last  balance  shown  on  your  stub.  If  the  numbers 
do  not  agree,  search  for  an  error  in  calculation  or  a  check  whose  stub  was  not  recorded.  Do 
not  give  up  the  problem  until  the  numbers  agree,  if  you  expect  to  keep  accurate  account  of  your 
money. 

SAN   FRANCISCO   FIRE 

During  the  winter  months,  Mr.  and  Mrs.  Woodward  tried  to  live  within  their  estimate. 
They  purchased  high-low  electric  lights  and  made  a  fireless  cooker.  They  also  found  that  by 


GAS  AND   ELECTRIC   METERS  27 

allowing  the  family  $14  for  health,  recreation,  incidentals,  and  clothing,  a  number  of  items 
that  they  had  formerly  considered  necessary  could  now  be  dispensed  with. 

On  April  18,  the  San  Francisco  fire  destroyed  the  hardware  store  in  which  Mr.  Woodward 
worked.  He  received  $  40  for  his  work  during  April,  with  the  promise  of  his  former  position 
if  the  store  should  later  be  able  to  resume  business.  During  April  and  May,  while  Mr. 
Woodward  was  out  of  employment,  he  divided  his  time  between  working  in  the  house  and 
garden  and  aiding  in  relief  work  for  the  refugees.  (1)  What  expenses  were  cut  down  during 
these  months?  (2)  What  expenses  could  not  be  reduced  ? 

Notice  that  the  food  account  during  May  came  to  only  $  18  for  two  grown  people  and  two 
children,  aged  3|-  and  1  year.  (3)  Consult  experts  to  find  what  is  the  most  nourishing  food 
that  they  could  eat  which  could  be  purchased  for  this  money. 

GAS   AND   ELECTRIC   METERS 

While  watching  the  electric  light  and  gas  bills,  Mrs.  Woodward  studied  the  meters 
closely.  When  the  pointer  on  the  right-hand  dial  of  the  gas  meter  moved  from  0  to  1,  it 
showed  that  100  cubic  feet  of  gas  had  been  consumed. 

\\TI  ji  -i     ,i  Til  100  thousand  10  thousand  1  thousand 

When  the  gas  company  read  the  meter  on  Jan.  14, 
the  pointers  showed  that  70,200  cubic  feet  of  gas  had 
been  consumed.  (4)  How  is  this  amount  shown  on 
the  accompanying  diagram  of  a  gas  meter  ? 

When  the  gas  company  read  the  meter  again  on 
Feb.  14,  they  found  that  the  meter  read  73,400 
cubic  feet.  (5)  How  many  cubic  feet  of  gas  had  'CuBIC  FEET  OF  GAS 


28 


FAMILY  EXPENSE  ACCOUNT 


10,000,000 


1,000,000 


100,000  watts 


10,000  watts 


been  used  during  the  month  ?     (6)    Draw  the  diagram  of  the  gas  meter  showing  the  second 
position  of  the  pointers.     (7)    Which  pointer  did  not  move  during  the  month  ?     Why  ? 
The  gas  bill  read  as  follows  :    -Meter  readings—      73,400 

70,200 

3,200  at  -f  0.90  per  1000,     $2.88 

(8)  Which  meter  reading  was  recorded  first,  the  upper  or  the  lower  ?  (9)  Which  number 
shows  the  amount  of  gas  consumed  during  the  month  ?  (10)  On  what  date  was  this  bill  paid  ? 
(11)  Account  for  the  amount  of  the  bill.  (12)  Watch  the  gas  meter  in  your  own  home 

between  two  consecutive  dates  when  it  is  read 
by  the  gas  company,  and  explain  the  bill 
which  is  presented  on  the  first  of  the  next 
month.  (13)  Watch  the  gas  meter  at  the 
beginning  and  end  of  its  use  for  the  family 
laundry,  and  calculate  the  cost  for  the  laun- 

1  kilowatt  contains  1000  watts.     When   the  pointer  on  the  dry  during  one  day. 

right-hand  dial  moved  from  0  to  1 ,  it  showed  that  the  amount  of  rr^-i         IJ.-TI,  i  1^1         ±1 

electricity  used  was  1  kilowatt,  or  1000  watts.  The  eleCtnC  hght  meter  sh°Wed   that  the 

The  above  meter  reading  might  be  expressed  in  either  of  two  electricity  was   measured    ill  Ullits  Called  kilo- 

ways:  (1)  985  kilowatt  hours,  or  985  k.  w.h.;  (2)  985,000  watt  watt  hours  —  k.  W.  h.  Oil  January  14,  when 
hours,  or  985,000  w.  h.  The  first  reading  is  more  customary.  .  T  .  ,  .  „ 

the  Electric  Lighting  Co.  read  the  meter,  the 

pointers  were  placed  as  in  the  accompanying  diagram.  (14)  Read  the  number  of  kilowatt 
hours  that  the  meter  recorded. 

When  the  Electric  Lighting  Co.  read  the  meter  again  on  Feb.  14,  they  found  that  the 
meter  read  1,002,000  watt  hours.     (15)    How  many  watt  hours  had  been  used  ?     How  many 


10,000k.  w.h.        1000  k. w.h. 


100k.  w.h. 


10k.  w.h. 


GAS  AND  ELECTRIC  METERS  29 

kilowatt  hours  had  been  used  ?     (16)    Draw  the  diagram  of  the  electric  light  meter,  showing  the 
second  position  of  the  pointers. 

(17)  Which  new  dial  must  now  be  used  for  the  first  time  ?     Why? 
The  electric  light  bill  read  as  follows : 

Meter  readings  — 1002  k.  w.  h. 
985  k.  w.  h. 
17  kilowatt  hours  at  9^  per  k.  w.  h.  =  $1.53 

(18)  Which  meter  reading  was  recorded  first,  the  upper  or  the  lower  ? 

(19)  Which  number  shows  the  amount  of  electricity  consumed  during  the  month  ? 

(20)  On  what  date  was  this  bill  paid  ? 

(21)  Account  for  the  amount  of  the  bill. 

(22)  Watch  the  electric  light  meter  in  your  own  home  between  two  consecutive  dates 
when  it  is  read  by  the  company,  and  explain  the  bill  which  is  presented  on  the  first  of  the  next 
month. 

(23)  Watch  the  electric  meter  at  the  beginning  and  end  of  its  use  for  the  electric  iron,  and 
calculate  the  cost  of  the  ironing  during  one  day  and  the  cost  of  electricity  used  by  the  iron  per 
hour. 

(24)  An  electric  toaster  costs  from  $3.50  to  $4.00,  and  a  vacuum  cleaner  from  $ 35  to  $60. 
Find  the  cost  per  hour  of  running  these  by  electricity  and  the  average  number  of  hours  needed 
by  a  family  of  four  members. 


FAMILY  EXPENSE  ACCOUNT 
SEVENTH  YEAR — 1907 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JUNE 

JULY 

A  co. 

SEPT. 

OCT. 

Nov. 

DEC. 

I    Household  •     1.  Rent      

1  £>  nn 

i  f\  nn 

i  T  nn 

1  K  AA 

1  T  nn 

i  E\  nn 

1  C  AA 

i  ?\  nn 

1  &  AA 

1  .^  Afl 

1  F.  f\(\ 

•    2.  Electric  Light    .     . 
3.  Gas  

1O.UU 

1.80 

1.71 

1O.UU 

1.89 
9  YO 

1O.UU 

1.53 

2.89 

1O.UU 

1.62 

1O.UU 

1.17 
9  70 

IO.UU 

1.44 

IO.UU 

1.62 
0  97 

1  0.UU 

1.09 

IO.UU 

1.71 

1  O.UU 

1.89 

IO.UU 

2.07 

4.  Fuel      

i  P;  (\i\ 

5.  Garbage    .... 

.35 

.35 

.35 

.35 

.35 

.35 

lO.UU 

.35 

.35 

.35 

.35 

.35 

.35 

6.  Help     

4.  nn 

4.  nn 

4.  nn 

4AA 

4.  nn 

4c\(\ 

A  l\f\ 

A    AA 

A    AA 

A  nn 

7.  Laundry    .... 

1.20 

1.20 

rr.UU 

1.20 

.UU 

1.20 

L20 

L20 

.uu 
1.20 

"±.UU 

1.20 

".75 

4.UU 

1.20 

4.UU 

1.20 

1.UU 

1.20 

8.  Furnishings  .     .     . 

4.03 

1.10 

3.20 

2.15 

1.15 

.75 

1.14 

10.05 

1.10 

.75 

3.75 

1.25 

II     Food-             9.  Food      

9^  14. 

91  in 

93  4.9 

99  ftQ 

„_  „. 

94.  9ft 

99  fil 

on  43 

1  O  1  C 

9/1    1  A 

9O  AK 

97  1  A 

_  '  i  .  I  I 

_  i  .  i  '  i 

_  •  t  .  i  _ 

—  _  .oy 

_«'.•!  1 

•.^r.wO 

_  _  .  '  1  1 

JU.4O 

ly.lo 

J4.1U 

J-.UO 

-i  .14- 

III.   Family:       10.  Carfare 

(to  San  Francisco) 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

3.00 

4.00 

4.00 

4.00 

11.  Health  

C\JL 

4.n 

CIA 

4.  no 

1    1  A 

n~ 

41  A 

Irt^ 

o  ^n 

^  AA 

11  A 

12.  Accident  Insurance 

' 

.t\j 
20.00 

O.1U 

' 

1.  IU 

.JO 

.IU 

•UO 

J.OU 

o.uu 

.60 

.IU 

13.  Incidentals     .     .     . 

3.10 

1.11 

2.05 

1.05 

2.15 

11.15 

3.07 

3.10 

1.04 

7.45 

3.22 

1.10 

14.  Education       .     .     . 

1.50 

.75 

2.00 

.75 

1.35 

.75 

2.50 

.75 

.75 

1.25 

.75 

.75 

15.  Recreation      .     .     . 

.75 

.50 

1.00 

.25 

3.10 

1.10 

.50 

20.10 

1.10 

8.00 

IV.  Religion  :      16.  Church  and  Charity 

1.50 

1.50 

1.50 

Charity 
5.00 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

5.00' 

1.50 

V.  Personal:      17.  Clothing    .... 

4.05 

8.05 

10.17 

7.00 

18.00 

5.40 

5.40 

7.10 

1.60 

2.10 

6.95 

22.00 

18.  Pocket  Money    .     . 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

VI.  Savings:       19.  Savings  Bank     .     . 

20.00 

7.00 

10.00 

18.00 

10.00 

13.00 

5.00 

15.00 

17.00 

17.00 

1300 

20.  Life  Insurance  .     . 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

Salary,  $  95  a  month.     Two  weeks'  vacation,  with  pay,  in  August. 
PROBLEM.  —  Find  cash  balance  at  end  of  year. 


Planning  to  buy  lot  and  build  home. 


.     DATE   OF   INTEREST  31 

INTEREST  ON   SAVINGS 

During  the  year  1907,  Mr.  and  Mrs.  Woodward  realized  that  if  they  continued  to  live 
within  their  estimate,  allowing  $  14  a  month  for  clothing,  furnishings,  incidentals,  and  recrea- 
tion, their  savings  would  soon  be  sufficient  to  make  the  first  payment  on  a  lot  on  which  they 
could  build  their  own  home.  They  began,  therefore,  to  calculate  the  interest  that  their  savings 
bank  deposits  would  bring  them. 

Their  checking  account  could  be  opened  at  any  commercial  bank,  but  it  did  not  draw  interest 
because  the  money  stayed  in  the  bank  such  a  short  time.  The  savings  account  the^y  opened  at 
a  savings  bank,  which  frequently  uses  the  same  building  as  a  commercial  bank,  but  which  is  a 
different  concern.  People  deposit  in  a  savings  bank  only  the  money  which  they  expect  to  have 
in  the  bank  long  enough  to  draw  interest.  In  many  savings  banks,  one  cannot  withdraw  money 
without  giving  thirty  days'  notice ;  and  one  cannot  draw  checks  against  a  savings  account. 


Savings  banks  usually  pay  4  %  a  year  interest  on  deposits  that  have  been  in  the  bank  more 
than  three  months.  The  bank  calculates  this  interest  twice  a  year,  on  January  1  and  July  1. 
Since  the  Woodward  family  always  deposited  their  savings  during  the  first  five  days  of  the 
month,  this  means  that : 

Their  deposit  of  $15  in  March,  1901,  would  receive  interest  on  July  1,  1901. 
Their  deposit  of  $15  in  April,  1901,  would  receive  interest  on  July  1,  1901. 
Their  deposit  of  $15  in  May,  1901,  would  receive  interest  on  Jan.  1,  1902. 
The  May  deposit  would  not  receive  interest  earlier,  because  on  July  1,  1901,  the  May  de- 
posit had  not  been  in  the  bank  three  months. 


32 


FAMILY  EXPENSE  ACCOUNT 


PROBLEM  1.  — Read  the  deposits  in  1901  that  would  receive  interest  Jan.  1,  1902. 

PROBLEM  2.  — When  would  the  deposit  of  $5  in  October,  1901,  first  receive  interest? 

PROBLEM  3.  —  Read  all  the  deposits  that  would  receive  interest  July  1,  1902. 

PROBLEM  4.  —  Write  the  amount  of  the  last  deposit  that  would  receive  interest  on  each  of 
the  following  dates  :  Jan.  1,  1903  ;  July  1,  1903  ;  Jan.  1,  1904  ;  July  1,  1904  ;  Jan.  1,  1905  ; 
July  1,  1905 ;  Jan.  1,  1906 ;  July  1,  1906 ;  Jan.  1,  1907 ;  July  1,  1907 ;  Jan.  1,  1908. 

BALANCE 

When  money  is  deposited  in  the  bank,  the  amount  deposited  is  entered  under  the  column 

headed  "  Balance  in  Bank."  The  amount 
deposited  is  added  to  the  preceding  balance. 
A  rough  estimate  of  the  amount  in  the  bank 
might  be  expressed  as  follows  : 

PROBLEM  5.  —  Explain  how  the  lines 
beneath  thrdates  April  2  and  Oct.  4  in  the  ac- 
companying table  correspond  with  the  dates 
of  the  last  deposits  that  draw  interest  July  1, 
1901,  and  Jan.  1,  1902.  Continue  the  use 
of  such  lines  in  making  out  bank  accounts. 
PROBLEM  6.  —  Continue  the  accom- 
panying table  until  Nov.  1,  1902.  On  this 
date  the  family  withdrew  $120  from  the 
bank.  What  balance  was  left? 


DATE 

DEPOSIT 

BALANCE  IN  BANK 

Mar.  1,  1901 

$15.00 

$    15.00 

Apr.  2 

15.00 

30.00 

May  1 

15.00  ! 

45.00 

June  4 

12.00 

57.00 

July  1 

57.00  +  interest  through 

April  5 

July  1 

16.00 

72.00  +       "              " 

" 

Aug.  2 

12.00 

84.00  +       «              « 

« 

Sept.  3 

10.00 

94.00  +       "              " 

tt 

Oct.    4 

5.00 

99.00  +       "              " 

" 

Nov.  1 

12.00 

111.00  +       «              « 

it 

Dec.  2 

5.00 

116.00  +       "              " 

« 

Jan.    1,  1902 

116.00  +       "              " 

Oct.  5 

Jan.    2,  1902 

10.00 

126.00  +       "              " 

u 

SAVINGS  BANK  ACCOUNT 


33 


It  is  evident  that  as  the  balance  in  the  bank  increases,  the  interest  also  increases.  By 
Nov.  1,  1902,  the  family  has  received  interest  on  their  deposits  three  times,  and  interest  will 
again  fall  due  two  months  later.  It  becomes  necessary,  therefore,  to  calculate  the  exact  amount 
of  interest  due.  To  avoid  expense  in  bookkeeping,  the  banks  do  not  usually  pay  interest  on  a 
fraction  of  a  dollar  or  give  interest  which  amounts  to  less  than  one  cent. 


DATE 

DEPOSIT 

TIME  TO 

BALANCE 

Month 

Year 

Mar.  1 

1901 

$  15 

4  mo. 

$15 

Apr.  2 

15 

3 

30 

May  1 

15 

2 

45 

June  4 

12 

1 

57 

July  1 

Interest 

TIME  TO   INTEREST 

Since  interest  is  computed  twice  a  year,  a 
monthly  savings  account  necessitates  counting  the 
number  of  months  which  each  deposit  stays  in  the 
bank  until  Jan.  1  and  July  1,  the  dates  on  which 
interest  is  declared.  Thus  the  Woodward  account 
would  be  entered  as  in  the  accompanying  form. 

Explain  each  item. 


CORRESPONDING  DEPOSIT   FOR   ONE  MONTH 

In  calculating  interest,  the  bank  saves  time  by  expressing  each  deposit  as  though  a  corre- 
sponding deposit  had  been  placed  in  the  bank  for  one  month.  Thus  :  In  March,  1901,  $15  was  de- 
posited, which  on  July  1  would  receive  interest  for  4  months.  Why  ?  But  the  amount  of  interest 
would  be  the  same  as  though  $60  had  been  deposited  for  one  month,  since  15  x  4  =  60. 

PROBLEM  7.  — Calculate  the  interest  at  4%  a  year  on  $15  for  4  months,  and  also  on  $60 
for  one  month,  and  show  that  the  amounts  of  interest  are  the  same. 

In  April,  1901,  $  15  was  deposited  which,  on  July  1,  would  receive  interest  for  3  months. 


34 


Why  ?  But  the  amount  of  interest  would  be  the  same  as  though  $  45  had  been  deposited  for 
one  month,  since  15x3  =  45. 

PROBLEM  8.  —  Calculate  the  interest  at  4  %  a  year  on  $  15  for  3  months,  and  on  $  45  for 
one  month,  and  show  that  the  amounts  are  the  same. 

PROBLEM  9.  — Fill  in  the  blanks  in  the  following  table  with  interest  at  4  %  per  annum: 

1.    Deposit  of  f  100  for  3  months  earns  same  interest  as  deposit  of  <$      ?  for  1  month. 

2_         «         «       50  '<    6       "  "        "  "        ''        "        "          ?  "    1      " 

g_  i.  ..         15    ,i      2         "  "  "  "  "  "          "  ?    "     1         " 


4. 


12 


Banks  frequently  insert  a  column  headed  "Corresponding  Deposit  for  one  Month"  which 
they  use  as  their  basis  for  computing  interest.  The  numbers  in  this  column  do  not  affect  the 
numbers  in  the  balance  column,  which  shows  the  amount  of  money  in  the  bank.  The  "  Corre- 
sponding Deposit "  column  is  used  only  in  computing  interest.  The  complete  record  of  the 
Woodward  savings  account  would  therefore  begin  as  follows : 


DATE 

DEPOSIT   • 

TIME  TO 
INTEREST 

CORRESPONDING 
DEPOSIT  FOB 
1  MONTH 

BALANCK  IN  BANK 

Month 

Tear 

Cents 

Cents 

Mar.  1 

1901 

• 

1 

5 

4  mo. 

6 

0 

-5! 

9- 

1 

5 

Apr.  2 

1901 

1 

5 

3 

1 

0 

5 

3 

0 

May  1 

1901 

1 

5 

2 

3 

0 

4 

5 

June  4 

1901 

1 

2 

1 

4 

2 

5 

7 

July  1 

1901 

Int.  (on  $105  for  1  mo.) 

35 

5 

7 

35 

SAVINGS    BANK    ACCOUNT  35 

Notice  that  the  April  deposit  of  815  for  3  mo.  gives  the  same  interest  as  a  corresponding  de- 
posit of  $45  for  1  month.  When  45  is  added  to  60,  it  gives  a  total  corresponding  deposit  of  $  105. 

PROBLEM  10.  —  Calculate  the  "  corresponding  deposit "  column  for  the  following  deposits : 
Feb.  2,  $20;  Mar.  3,  $10;  April  4,  $17. 

PROBLEM  11.  —  Notice  that  a  line  is  drawn  after  the  corresponding  deposit  for  April, 
since  this  number,  $105,  is  to  be  used  in  calculating  the  interest  paid  July  1.  The  corre- 
sponding deposit  for  May  therefore  starts  a  new  series.  Explain  how  the  numbers  30  and  42 
in  the  corresponding  deposit  column  are  obtained. 

PROBLEM  12. — The  interest  on  $105  for  1  month  is  $.35.  Show  that  this  amount  of 
money  could  have  been  obtained  also  by  calculating  the  interest  on  $15  for  4  mo.  and  adding 
this  to  the  interest  on  $15  for  3  mo.  The  present  method,  however,  reduces  the  number  of 
times  interest  must  be  calculated  to  two  a  year.  Explain. 

PROBLEM  13.  —  Notice  that  the  word  Interest  is  inserted  under  the  deposit  column  on 
July  1,  because  the  interest  $.35  is  deposited  to  the  family's  account  at  this  time.  Where  is 
the  phrase  "  Int.  on  $105  for  1  mo."  obtained  ? 

PROBLEM  14. — The  balance  in  the  bank  is  $57.35  on  July  1.  Unless  it  is  withdrawn 
before  Jan.  1,  the  balance,  $57,  will  stay  with  the  bank  six  months,  and  will  receive  as  much 
interest  as  $342  deposited  for  1  month.  Explain.  (Omit  $.35  when  computing  interest.) 

On  July  1,  this  balance  must  be  entered  under  the  deposit  column  in  order  to  compute  the 
"  corresponding  deposit."  But  this  balance  must  not  be  entered  under  the  dollars  column, 
because  it  is  not  an  additional  deposit.  The  complete  record  of  the  Woodward  savings  account 
for  two  years  is  therefore  as  shown  in  the  table  on  page  37.  Explain  each  of  the  following 
items  in  the  account : 


36  FAMILY    EXPENSE    ACCOUNT 

a.  The  position  of  the  horizontal  lines. 

b.  Show  in  the  budgets  for  1901  and  1902,  pages  2  and  5,  where  the  numbers  in  the  deposit 
column  are  to  be  found. 

c.  In  the  deposit  column  explain  where  the  following  balances  were  obtained:    $57.35, 
$128.31. 

d.  In  the  corresponding  deposit  column  explain  where  the  numbers  were  obtained  as  fol- 
lows :  384  =  6  x  57  +  42,  474  =  ? 

e.  In  the  deposit  column  explain  how  each  amount  of  interest  is  obtained. 

/.    Why  are  the  cents  not  included  in  the  balance  entered  under  the  deposit  column  ? 

g.  In  July,  1902,  the  bank  assumed  that  the  balance,  $216,  would  stay  in  the  bank  6 
months  and  therefore  wrote  1358  in  the  corresponding  deposit  column.  But  when  $120  was 
withdrawn  in  November,  this  withdrew  interest  for  2  months,  and  therefore  240  must  be  sub- 
tracted from  1541  and  the  January  interest  computed  on  $1301  for  1  month.  Explain. 

PROBLEM  15.  —  Complete  the  bank  account  for  the  Woodward  family  through  April  1, 
1908.  Notice  withdrawals  May,  1905,  June,  1906.  Do  not  write  any  sheet  a  second  time,  to 
avoid  errors  in  copying.  Use  banking  paper  ruled  as  in  the  accompanying  table  at  end  of  book. 
Use  ink  and  make  neat,  legible  figures.  As  soon  as  a  single  sheet  is  correct,  hand  it  to  the 
teacher  in  order  to  obtain  a  record  for  accuracy  and  speed. 

Notice  that  on  April  1,  the  family  made  the  first  payment  on  their  house.  It  becomes 
necessary,  therefore,  to  find  how  much  they  had  in  the  bank  with  which  to  begin  buying  their 
home. 

PROBLEM  16.  —  Keep  the  bank  account  of  a  family  which  is  saving  money  to  buy  a  home. 
Use  blanks  at  end  of  book. 


SAVINGS    BANK    ACCOUNT 


37 


ACCOUNT  OF  MR.  AND  MRS.  FRANK  WOODWARD 


DATE 

DEPOSIT 

TIME  TO 
INTEREST 

CORRESPONDING 
DEPOSIT  FOR 
1  MONTH 

BALANCE  IN  BANK 

Month 

Mar.  1 
Apr.  2 

Year 
1901 
1901 

Int.  on  $105  for  1  mo. 
Bal.  $57. 

Int.  on  $589  for  1  mo. 
Bal.  $118. 

Int.  on  $922  for  1  mo. 
Bal.  $206. 

Withdrew 
Int.  on  $1301  for  1  mo. 

1 

1 
1 
1 
1 

1 
1 
1 

1 

1 

2 

1 

2 

1 

1 

1 
2 

5 
5 

5 

2 

5 
2 
0 

5 

2 

6 

1 

0 
0 
5 
2 

8 
8 

8 

5 
0 
4 

Cents 

35 

96 

07 
53 

4  mo. 
3 

1 

6 
0 

0 

5 

$ 

1 

1 
1 

1 

1 
1 

1 

2 
2 

2 
2 
1 
1 

1 
3 
4 

5 
5 

7 
8 
9 
0 
1 
1 
1 

2 

4 

6 

8 

0 
0 

2 
3 
1 
2 

5 
0 
5 

7 

7 

2 
4 
4 
9 
1 
6 
8 

8 
8 
3 
5 
8 
6 

4 
9 
9 
8 

(7«n<« 

35 

35 
35 
35 
35 
35 
35 
31 

31 
31 
31 
31 
31 
38 

38 
38 
38 
91 

May  1 
June  4 
July  1 
July  1 
July  1 
Aug.  1 
Sept.  2 
Oct.  3 

1901 
1901 
1901 
1901 
1901 
1901 
1901 
1901 

2 
1 

6 
6 
5 
4 
3 

3 
4 
5 
5 
5 

3 
4 

8 
7 
3 
7 
8 

0 
2 

4 
4 
4 
4 
9 

Nov.  1 
Dec.  4 
Jan.  2 
Jan.  2 
Jan.  2 
Mar.  3 
Apr.  4 

1901 
1901 
1902 
1902 
1902 
1902 
1902 

2 
1 

6 
6 
4 
3 

7 
7 
8 
9 

2 
4 
4 
3 

2 
2 

3 
9 
7 
2 
~T 
6 

9 
0 
8 
6 

4 

9 

7 
7 
7 
2 

May  2 
June  4 
July  1 
July  1 
July  1 
Aug.  1 
Dec.  2 

1902 
1902 
1902 
1902 
1902 
1902 
1902 

2 
1 

6 
6 
5 
1 

1 

1 

1 
1 

4 
2 

8 
6 
1 
1 

Jan.  1 

1993 

38 


FAMILY    EXPENSE    ACCOUNT 


FAMILY  EXPENSE   ACCOUNT 
EIGHTH  YEAR  — 1908 


JAN. 

FEU. 

MAR 

APR. 

MAT 

JUNK 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

DEC. 

I.  Household  :  1.  Rent  

1500 

1500 

1500 

2.  House  and  Lot     .     . 
3.  Water     

520.00 

26.00 
1.85 

26.00 
1.90 

26.00 
2.10 

26.00 
2.50 

26.00 
2.40 

26.00 
1.80 

26.00 
1.50 

26.00 
1.50 

4.  Electric  Light      .     . 
5.  Gas     

1.98 

2.88 

1.72 
3.05 

1.53 
2.42 

1.53 

3.91 

1.44 

2.87 

1.44 
2.76 

1.44 
2.41 

1.53 
2.59 

1.71 
2.64 

1.98 

2.87 

1.98 
2.95 

2.25 
3.10 

6.  Fuel   

15.00 

7.  Garbage      .... 

8.   Help  ($  2.10  a  day)    .      . 
9.  Laundry      .... 
10.  Furnishings     .     .     . 
11.  Survey  Lot       .     .     . 
12.  Search  Title     .     .     . 
13.  Record  Contract  .     . 
14.  Fire  Insurance     .     . 

II.  Food:         15.  Food  

.35 
4.20 
1.20 
1.15 

24.35 

.35 
4.20 
1.20 
1.34 

25.40 

.35 

4.20 
1.20 
1.09 

2420 

.35 
4.20 
1.20 
.50 
7.50 
15.00 
1.75 
10.50 

25.19 

.35 

8.40 
1.20 
12.00 

26.11 

.35 
4.20 
1.20 
7.10 

22.90 

.35 

4.20 
1.20 
3.20 

21.14 

.35 
4.20 
1.20 
2.15 

23.27 

.35 
4.20 
.75 
7.60 

26.24 

.35 
4.20 
1.20 
3.25 

•28.15 

.35 
4.20 
1.20 
1.10 

27.10 

.35 
4.20 
1.20 
4.00 

2815 

III.  Family:      16.  Family    

10.35 

26.44 

11.50 

40.10 

18.75 

9.25 

14.77 

9.40 

14.75 

15.80 

18.62 

12.95 

IV.  Religion:    17.  Church  and  Charity 

V.  Personal:    18.  Clothing 
19.  Pocket  Money      .     . 

VI.  Savings:    20.  Savings  Bank  .     .     . 
21.  Life  Insurance     .     . 

1.50 

6.25 
1.50 

18.00 
3.49 

1.50 

3.75 
1.50 

3.49 

1.50 

18.21 
1.50 

3.49 

Moving 

1.50 

2.10 
1.50 

3.49 

1.50 

1.10 
1.50 

3.49 

1.50 

10.50 
1.50 

3.49 

1.50 

7.16 
1.50 

3.49 

1.50 

19.40 
1.50 

3.49 

1.50 

9.75 
1.50 

3.49 

1.50 

18.62 
1.50 

3.49 

6.50 

20.21 
1.50 

3.49 

1.50 

18.40 
1.50 

3.49 

Salary,  $95  a  month.     Family  built  their  own  home  in  April;  moved  in  May;  withdrew <$ 550,  April  1,  1908. 
Mr.  Woodward  earned  f  15  a  month  by  keeping  outside  books  at  night  from  July  to  November  inclusive. 
PROBLEM.  — Find  cash  balance  at  end  of  year. 


INVESTMENTS  39 

SAFEGUARDS   CONCERNING  INVESTMENTS 

By  March,  1908,  Mr.  and  Mrs.  Woodward  had  accumulated  about  $600.  They  had  been 
asked  by  various  real  estate  companies  and  loan  associations  to  invest  their  money  with  them. 
In  order  to  avoid  unsafe  investments,  they  asked  advice  from  the  bank  where  their  savings 
were  deposited.  The  bankers  refused  to  recommend  any  investment  companies,  but  gave  them 
three  safeguards: 

1.  Any  company  that  has  been  long  established  and  ha's  made  its  business  reputation  is 

safer  than  one  that  is  only  a  few  years  old.     Explain  why  this  is  true. 

2.  A  trust  company  that  is  incorporated  under  the  banking  laws  of  the  state  or  a  building 

and  loan  association  subject  to  the  state  laws  governing  such  associations  is  usually 
considered  safe,  whereas  one  cannot  be  absolutely  sure  of  companies  that  are  not  re- 
quired to  comply  with  these  laws. 

3.  The  bank  is  required  by  law  to  make  only  such  investments  as  are  absolutely  safe,  and 

is  therefore  not  able  to  give  its  depositors  a  high  rate  of  interest.     Any  company  or 
association  that  pays  a  higher  rate  of  interest  than  a  bank  pays,  is  enabled  to  do  so 
only  because  it  makes  investments  of  the  funds  deposited  with  it  in  more  speculative 
enterprises  than  are  permitted  to  the  banks  under  the  banking  laws.      The  depositor 
with  such  a  company  or  association  is  therefore  running  a  greater  risk.     Any  com- 
pany that  pays  interest  of  more  than  5%  is  doing  so  at  such  a  risk  that  people  should 
not  invest  any  of  their  savings  in  such  a  concern.     Give  reasons  for  this  statement. 
In  a  few  days,  Mr.  and  Mrs.  Woodward  had  decided  to  buy  a  lot  and  build  a  house  by 
contract.     The  banker  approved  two  real  estate  firms  which  he  knew  were  in  good  standing. 


40  FAMILY   EXPENSE   ACCOUNT 

BUYING  A   HOME 

In  April,  1908,  the  real  estate  firm  built  a  house  on  a  40-foot  lot  costing  •$  15  a  front  foot, 
for  which  they  gave  Mr.  and  Mrs.  Woodward  a  contract  of  sale.  According  to  the  contract, 
the  builder  erected  a  six-room  house  worth  $2000  on  the  lot  chosen  on  Milvia  St.,  near  Cedar. 
He  retained  the  title  to  the  property  until  it  had  been  paid  for  by  the  iirst  cash  payment  of  -1520, 
which  was  one-fifth  of  the  investment,  and  by  monthly  instalments  of  $>  26  each,  interest  at 
8  %  per  annum.  He  thus  protected  himself  in  case  the  family  failed  to  pay,  by  retaining  the 
title  to  the  house  and  lot.  Mr.  and  Mrs.  Woodward  held  the  contract  of  sale,  which  they 
recorded  at  the  Hall  of  Records  for  a  fee  of  $1.75.  By  recording  the  contract  of  sale  and 
saving  their  receipts  showing  their  monthly  payments  on  the  house,  also  their  cancelled  checks 
for  these  payments,  they  protected  themselves  in  case  the  builder  should  fail  to  give  them  the 
title  when  the  house  and  lot  were  paid  for.  They  also  inserted  a  clause  in  the  contract  which 
gave  them  the  privilege  of  securing  the  title  at  any  time  by  paying  their  obligations  in  full. 

QUESTIONS.     1.    State  the  width  of  the  lot,  price  per  foot,  and  multiply  to  find  the  total  price. 

2.  State  the  value  of  the  house  to  be  built  and  the  value  of  house  and  lot  together. 

3.  What  fraction  of  the  value  of  the  house  and  lot  was  paid  for  in  the  first  cash  payment? 

4.  How  much  money  was  paid  on  the  house  and  lot  in  April,  1908?     How  much  money 
was  still  due  on  the  principal  ?     At  what  rate  of  interest  ? 

5.  How  much  money  did  the  Woodward  family  contract  to  pay  the  real  estate  firm  each 
month,  beginning  May,  1908?     How  were  they  able  to  pay  this  large  sum  for  which  they  had 
not  allowed  in  their  previous  budgets  ? 

6.  What  other  expenses  must  be  met  when  buying  a  house  and  lot  besides  the  payments 
for  the  land  and  building  ? 


BUYING  A  HOME 


41 


PROBLEM  1.  —  On  April  1,  1908, 'the  family  owed  the  real  estate  firm  $2080.  Why? 
Find  the  interest  due  on  this  money  by  May  1,  1908,  at  8  %  per  annum." 

PROBLEM  2.  —  The  total  amount  paid  to  the  real  estate  firm,  May  1,  1908,  was  $  26. 
Of  this  money  part  was  interest  and  part  was  principal.  The  preceding  problem  showed  the 
amount  of  interest  due.  Subtract  this  interest  from  $  26.  to  find  how  much  of  the  principal 
was  paid  on  May  1.  Was  the  interest  paid  more  than  amount  paid  on  the  principal  ? 

PROBLEM  3.  —  The  preceding  problems  show  the  principal  paid  May  1.  Subtract  this 
from  $  2080  to  find  how  much  principal  was  still  due.  Find  the  interest  on  this  principal 
from  May  1  to  June  1  at  8  %  per  annum. 

a.  Record  the  interest  in  the  proper  column  as  shown  below. 

b.  Subtract  the  interest  from  $26  to  find  the  principal  paid. 

c.  Subtract  the  principal  paid  from  the  balance  due  May  1  to  find  the  balance  still  due  on 
the  principal. 

PROBLEM  4.  —  Explain  each  item  in  the  table  on  page  42  and  continue  the  table  until  1912, 
when  the  house  was  mortgaged.  Find  the  balance  due  on  the  principal  at  the  time  that  the 
house  was  mortgaged.  Use  blanks  at  end  of  book  for  "  Payments  on  house  and  lot." 


DATE  OF  PAYMENT 

TOTAL  PAYMENT 

AMOUNT  PRINCIPAL 

AMOUNT  INTEREST    • 

BALANCE  DUE 
ON  PRINCIPAL 

April  1,  1908 

$  520.00 

$  520.00 

$  2080.00 

May  1,  1908 

26.00 

12.13 

$  13.87 

2067.87 

June  1,  1908 

20.00 

12.22 

13.78 

2055.65 

42  FAMILY  EXPENSE  ACCOUNT 

PKOBLEM  5.  —  In  April,  1908,  the  family  withdrew  from  the  savings  bank  sufficient  money 
to  cover  the  cash  payment  on  the  lot,  surveying  the  land,  searching  the  title,  recording  the 
contract  of  sale,  and  fire  insurance,  $10.  How  much  did  they  draw?  How  much  remained 
in  the  bank  as  a  cash  reserve  ? 

NIGHT  WORK 

To  meet  the  expenses  of  moving  and  making  the  first  payment  on  the  house  and  lot,  Mr. 
and  Mrs.  Woodward  withdrew  $  550  from  the  savings  bank.  They  found,  however,  that  it  was 
difficult  to  make  a  monthly  payment  of  $  26  instead  of  paying  $>  15  for  rent  as  formerly.  With 
their  utmost  endeavors  they  were  unable  to  live  within  their  salary.  Mr.  Woodward  therefore 
worked  at  night  keeping  sets  of  books  for  outside  firms,  and  received  $  15  a  month  from  July 
to  November  inclusive.  He  found,  howe.ver,  that  the  five  months  of  extra  work  impaired  his 
eyesight,  and  he  was  obliged  to  give  it  up. 

Among  the  other  methods  of  increasing  the  family  income,  Mr.  Woodward  considered 
instructing  in  bookkeeping  in  the  Y.  M.  C.  A.  night  school,  acting  as  secretary  for  the  improve- 
ment club  in  his  neighborhood,  and  taking  charge  of  a  night  class  in  the  gymnasium.  Find 
the  price  paid  for  such  work  in  your  own  neighborhood  and  discuss  the  relative  advantages  of 
each  method. 


EXPENSES    FOR    A    YEAR 


43 


FAMILY  EXPENSE  ACCOUNT 
NINTH  YKAR  — 1909 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JTNB 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

DEC. 

I.  Household:  1.  House  and  Lot  .     . 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

2.  Taxes    

19.34 

18.72 

3    Water  

1.50 

1.50 

1.50 

1.65 

1.70 

1.90 

2.00 

2.10 

1.90 

1.70 

1.50 

1.50 

4.  Electric  Light    .     . 

1.26 

1.17 

1.26 

1.17 

1.17 

1.08 

1.08 

1.26 

1.35 

1.62 

1.80 

2.07 

5.  Gas  

3.75 

3.10 

3.72 

3.06 

2.97 

3.24 

3.60 

3.78 

3.24 

3.33 

3.54 

3.78 

6.  Fuel      

15.00 

7.  Garbage    .... 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

8.    Help  (  $  2.10  a  day) 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

2.10 

4.20 

4.20 

4.20 

9.  Laundry    .... 

1.80 

1.80 

1.80 

1.80 

1.80 

1.80 

1.80 

1.80 

.75 

1.80 

1.80 

1.80 

10.  Furnishings  .     .     . 

15.00 

1.00 

2.10 

.67 

1.10 

2.05 

1.10 

5.10 

2.33 

1.05 

Screen 

Porch 

II.  Food:         11.  Food     

37.90 

38.10 

35.27 

36.10 

31.05 

32.50 

33.25 

31.10 

25.08 

39.75 

36.10 

38.14 

III.  Family:      12.  Carfare 

(to  San  Francisco) 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

3.00 

4.00 

4.00 

4.00 

13.  Accident  Insurance 

20.00 

14.  Health  

.20 

6.10 

2.50 

1.10 

4.00 

2.75 

15.  Incidentals    .     .     . 

1.00 

.50 

.50 

3.50 

.59 

2.05 

.71 

1.00 

4.35 

5.10 

3.10 

16.  Education      .     .     . 

2.10 

.75 

.75 

.75 

.75 

.75 

.75 

1.55 

.75 

.75 

1.50 

1.10 

17.  Recreation     .     .     . 

.75 

.50 

2.10 

.90 

21.10 

.50 

2.10 

5.15 

Birthday 

Charitv 

Vacation 

Thkgvff. 

XllKtS 

IV.  Religion:    18.  Church  and  Charity 

1.50 

1.50 

1.50 

1.50 

6.50 

1.50 

1.50 

1.50 

1.50 

1.50 

2.50 

1.50 

V.  Personal:   19.  Clothing    .... 

21.25 

10.25 

21.14 

13.20 

15.75 

16.17 

24.14 

12.40 

32.25 

15.70 

5.10 

5.14 

20.  Pocket  Money    .     . 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

VI.  Savings:    21.  Savings  Bank     .     . 

10.00 

20.00 

20.00 

15.00 

8.00 

22.  Life  Insurance  .     . 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

Salary,  $100.     Boarder,  $25  a  month,  except  during  August  (paid  in  advance). 
PROBLEM.  —  Find  cash  balance  at  end  of  year. 


44 


FAMILY  EXPENSE  ACCOUNT 


CLOTHING 

PROBLEM  1. —  In  1909  the  Woodward  children  were  seven  and  four  years  old.  If  their 
clothing  bill  for  the  year  amounted  to  25  %  of  the  entire  outlay  for  clothing,  find  the  cost  of  the 
children's  clothing  during  1909. 

PKOBLEM  2.  —  Find  the  total  expenditure  for  the  year,  and  see  what  per  cent  of  this 
amount  was  spent  upon  clothing. 

PROBLEM  3.  —  Find  the  total  cost  of  the  following  estimates  for  clothing  for  a  boy  and 
a  girl  12  years  of  age  for  one  year.  Notice  which  articles  need  not  be  bought  a  second  year. 

PROBLEM  4.  —  Make  an  estimate  for  a  twelve-year-old  boy  or  girl,  using  local  prices  for 
the  clothing  that  you  are  in  the  habit  of  wearing.  Compare  the  total  with  that  in  the  follow- 
ing estimate.  Find  what  per  cent  of  your  family  budget  for  the  year  is  devoted  to  clothing. 


CLOTHING  ESTIMATE  FOR  ONE  YEAR 


6.00 
.75 


GlKLS 

I.   BOOTS  AND  SHOES 

Shoes  

Repairs 

Rubbers 

II.   COATS  AND  HATS 

Rain  coat $   2.00 

Heavy  coat       10.00 

Summer  coat 3.50 

Caps 1.50 

Hat 1.50 

Sweater   ,     ,     ,  4.00 


I.   BOOTS  AND  SHOES 
Shoes       .     .     . 
Repairs    .     .     . 
Rubbers  .     .     . 
II.   COATS  AND  HATS 
Rain  coat     .     . 
Overcoat      .     . 
Caps    .... 
Hat     .... 
Sweater   .     .     . 


BOYS 


$  28.00 

6.00 

.75 

$   4.50 

11.25 

1.00 

2.00 

6.50 


TAXES 


45 


III.  UNDERCLOTHING 

Hose 

Underwear,  skirts,  and  nightwear  . 

IV.  DRESSES 

Gingham  dresses 

White  dresses 

Woolen  dresses 

V.   INCIDENTALS 

Handkerchiefs 

Hair  ribbons,  gloves,  etc 

Umbrella 


i   2.50 
11.00 

i   5.00 

5.50 

11.00 

$   .90 
3.25 

1.00 


III.  UNDERCLOTHING 

Hose 

Underwear,  shirts,  and  nightwear 

IV.  SUITS 

Two  suits 

Two  pairs  of  corduroys     .     .     .     , 
V.   INCIDENTALS 

Handkerchiefs 

Ties,  belts,  etc 

Umbrella          .... 


$   3.00 
14.25 

9  20.00 
4.00 

9  1-20 
2.00 
1.00 


TAXES 

QUESTIONS.  Because  their  home  was  not  built  before  March  1,  Mr.  and  Mrs.  Woodward 
were  not  required  to  pay  taxes  until  April,  1909.  Find  the  amount  paid  at  this  time.  If  the 
taxes  were  not  paid  by  the  last  Monday  in  April,  they  would  have  been  increased.  (The  pen- 
alty varies  in  different  localities.) 

Taxes  in  California  are  payable  in  equal  amounts  during  November  and  April  in  two  dif- 
ferent offices.  City  taxes  are  payable  to  the  City  Tax  Collector  in  the  City  Hall  and  county 
taxes  to  the  County  Tax  Collector  at  the  County  Court  House.  The  Woodward  family  paid 
their  taxes  by  checks  mailed  to  these  two  offices  and  were  careful  to  see  that  these  checks  were 
mailed  before  the  last  Monday  in  November  and  in  April,  in  order  to  avoid  paying  the  extra 
penalty  for  delay.  In  the  city  of  Berkeley  15  %  is  added  to  the  November  instalment  if  not  paid 
by  the  last  Monday  in  November ;  -if  still  unpaid  after  the  last  Monday  in  April,  20  %  is  added 


46  FAMILY  EXPENSE  ACCOUNT 

to  the  first  instalment  and  5  %  to  the  second  instalment.     The  penalties  imposed  by  the  county 
vary  slightly.     Find  the  penalty  in  county  taxes  where  you  live. 

Mr.  Woodward  was  in  the  habit  of  writing  to  both  the  County  and  City  Tax  Collectors  to 
find  the  amount  due  on  their  property  early  in  the  month.  Although  the  house  decreased 
in  value  with  the  years,  the  increasing  value  of  the  land  offset  this  depreciation. 

1.  How  much  would  the  family  have  had  to  pay  as  a  penalty  for  not  being  prompt  in 
settling  city  taxes  ? 

The  tax  rate  on  property  varies  from  year  to  year.  The  house  and  lot  were  worth  12600, 
but  the  taxes  were  levied  upon  only  60  %  of  this  amount. 

2.  Upon  what  amount  of  money  was  the  tax  levied  ? 

3.  Since  the  tax  was  $19.34,  find  the  rate  per  cent  of  taxation. 

PROBLEM.  1.  — Since  taxes  were  levied  on  only  60%  of  the  value  of  the  property,  find, 
from  the  taxes  paid,  the  rate  of  taxation  during  the  years  1909  to  1914  inclusive. 

PROBLEM  2.  —  Find  the  city  and  county  taxes  in  your  own  town  and  calculate  the  penalties 
for  delinquent  taxes  on  your  own  home. 

TAKING  A  BOARDER 

Despite  the  fact  that  in  1909  Mr.  Woodward's  salary  was  raised  to  $100  per  month,  the 
expenses  could  not  be  kept  down  to  this  figure.  The  family  decided,  therefore,  to  build  a 
screen  porch  for  the  children  and  rent  one  room  to  a  boarder  at  $25  a  month.  Because  he 
paid  less  board  than  was  customary,  it  was  not  necessary  for  the  family  to  raise  their  standard 
of  living.  In  August  he  took  his  vacation. 


EXPENSES    FOR    A    YEAR 


47 


FAMILY  EXPENSE  ACCOUNT 
TENTH  YEAR  — 1910 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

Due. 

I.  Household  :     1.  House  and  Lot    .     .     . 
2.  Taxes    

26.00 

26.00 

26.00 

26.00 
18.72 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 
19.50 

26.00 

3.  Water  

1.60 

1.50 

1.50 

1.75 

1.80 

1.85 

2.10 

2.40 

2.20 

1.90 

1.40 

1.60 

4.  Electric  Light     .     .     . 
5.  Gas  

1.35 
3.60 

1.26 
3.42 

1.17 
3.61 

1.26 
3.06 

1.17 
2.91 

1.17 

2.87 

1.08 
3.05 

1.26 
2.89 

1.35 
2.50 

1.62 
3.31 

1.89 
3.45 

2.07 
3.61 

6.  Fuel  

15.00 

7.  Garbage     

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

8.  Help      

4  20 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

2  10 

4.20 

4.20 

4.20 

9.  Laundry     

1  20 

1.20 

1.20 

1.20 

1.20 

1.20 

1.20 

1.20 

.75 

1.20 

1.20 

1.20 

10.  Furnishings    .... 
11.  Insurance    to    Protect 
Home     .          ... 

.25 

18  17 

.14 

3.10 

.52 

1.17 

.58 

.97 

.84 

1.90 

4.10 

3.70 

1.50 

II.  Food:            12.  Food     

III.  Family  :        13.  Carfare 
(to  San  Francisco)  . 
14.  Accident  Insurance 
15.  Health  

38.10 

4.00 
.50 

36.14 

4.00 
20.00 
.75 

36.15 

4.00 
3.90 

32.05 

4.00 
4.10 

32.41 

4.00 
2.50 

33.05 

4.00 
.40 

31.28 
4.00 

27.16 

4.00 
.60 

34.14 

4.00 
.15 

31.18 

4.00 

.82 

36.19 

4.00 
.90 

37.14 

4.00 
1.40 

16.  Incidentals     .... 
17.  Education  

1.10 
2  10 

.65 
75 

2.75 
.75 

1.10 
.75 

3.40 
75 

2.05 
1  00 

4.10 

.75 

1.10 
3.10 

1.15 

75 

2.75 
.75 

1.08 
6  75 

4.00 
.75 

18.  Recreation     .... 

School 

.20 

1.50 

.80 

.60 

.30 

2.00 

1.10 

.50 

.75 

.30 

3.00 

IV.  Religion  :      19.  Church  and  Charity    . 
V.  Personal  :      20.  Clothing    

1.50 
20.05 

1.50 
8.15 

1.50 
20.14 

1.50 
12  15 

6.50 

14  72 

1.50 
15.15 

1.50 
22.14 

1.50 
11.60 

1.50 
30.42 

1.50 

13.70 

2.50 
4.75 

2.50 
6.11 

21.  Pocket  Money    . 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.60 

VI.   Savings:       22.   Savings  Bank      .     .     . 
23.  Life  Insurance    .     . 

3.49 

3.49 

10.00 

3.49 

3.49 

25.00 

3.49 

30.00 

3.49 

3.49 

3.49 

1200 

3.49 

15.00 

3.49 

3.49 

20.00 

3.49 

Salary,  $  100.     House  insured  against  debt.    Boarder,  $  25  a  month,  except  during  August. 
PROBLEM.  —  Find  cash  balance  at  end  of  year. 


48  FAMILY  EXPENSE  ACCOUNT 

INSURANCE  TO   PROTECT  THE   HOME 

By  January,  1910,  Mr.  and  Mrs.  Woodward  realized  that  they  had  not  yet  deposited 
enough  money  in  the  bank  to  have  a  sufficiently  large  cash  reserve  in  case  of  emergencies. 
They  also  realized  that  if  Mr.  Woodward  should  die,  there  would  be  no  steady  income  to  pay 
off  the  large  debt  on  the  home.  They  therefore  decided  to  carry  additional  life  insurance 
in  the  form  of  a  five-year  renewable  and  convertible  term  policy.  In  case  of  Mr.  Woodward's 
death,  the  proceeds  of  the  policy  were  to  be  applied  to  protect  the  home  and  furniture.  They 
consulted  an  insurance  company  in  good  standing,  and  were  advised  to  adopt  this  method  of 
protecting  the  home  from  the  burden  of  heavy  debt.  Mr.  and  Mrs.  Woodward  took  out  a 
five-year  term  policy,  for  which  they  paid  at  the  rate  of  $12.11  for  $1000  of  protection.  They 
decided  to  pay  $18.17  a  year  to  protect  their  home.  If  Mr.  Woodward  should  die  during  the 
year,  the  payment  of  $18.17  would  insure  the  company's  paying  $1500  to  the  real  estate  company 
to  decrease  the  amount  owing  on  the  house  and  lot. 

Mr.  Woodward  paid  at  the  rate  of  $12.11  for  $1000  worth  of  protection,  because  he  was 
thirty-five  years  of  age.  At  the  end  of  five  years,  when  he  went  to  the  company  to  renew  his 
policy,  he  would  be  required  to  pay  $13.67  per  $1000,  the  higher  rate  being  due  to  his  greater 
age.  During  this  time,  however,  the  amount  owing  on  the  house  had  decreased,  so  that  he  only 
needed  to  insure  it  for  a  smaller  amount  of  money.  He  decided  to  insure  for  $1000.  How 
much  less  was  this  than  the  amount  due  on  the  home  ? 

QUESTIONS.  1.  At  the  rate  of  $12.11  for  a  protection  of  $1000,  how  much  money  must 
be  paid  to  obtain  a  protection  of  $3500  ? 

2.  If  Mr.  Woodward  had  wished  to  obtain  $2000  insurance  when  he  took  out  his  five- 
year  renewable  term  policy  in  January,  1910,  how  much  would  he  have  had  to  pay  for  it  ? 


INSURANCE  49 

3.  Mr.  Woodward  took  out  an  insurance  policy  whose  proceeds  would  be  applied  to  pro- 
tect the  home  in  the  event  of  his  death.  Is  such  a  policy  most  desirable  when  the  payments 
on  the  house  are  beginning,  or  when  they  are  nearly  finished  ?  Why  ? 

PROBLEM  1.  —  Find  the  amount  owing  on  the  house  and  lot  in  January,  1910. 

PROBLEM  2.  —  If  Mr.  Woodward  should  die  during  this  month,  and  the  proceeds  of  this 
policy  were  applied  to  the  debt  on  the  home,  how  much  money  would  still  be  owing  on  the 
home  ? 

PROBLEM  3.  —  Find  local  situations  where  it  would  be  advantageous  to  use  a  five-year 
renewable  term  policy  to  protect  the  home  against  debt.  Show  how,  when  the  debt  is  cleared, 
the  premium  may  be  kept  up  to  provide  for  the  education  of  the  children. 

PROBLEM  4.  —  If  the  Woodward  family  had  decided  to  rent  their  home,  if  they  were  for- 
tunate enough  to  secure  a  permanent  tenant,  their  situation  might  be  as  follows  :  Rent  received, 
10  %  of  cost  of  house  and  lot.  Expenses  :  (1)  Taxes  levied  on  60  %  of  the  value  of  the  house 
and  lot  at  the  rate  of  $2.37  per  $100.  (2)  Fire  insurance  for  one  year,  at  the  rate  of  $.70 
per  $1.00  for  3  years.  (The  value  of  the  house  was  $2000.)  (3)  Repairs,  4%  of  the  value 
of  the  house. 

Find  the  profit  made  from  renting  the  house  for  one  year.  Compare  this  profit  with  the 
income  arising  from  investing  $2600  at  5  %  per  annum.  Which  is  the  safer  method  of  invest- 
ment? Why? 


50 


FAMILY    EXPENSE    ACCOUNT 


FAMILY   EXPENSE  ACCOUNT 
ELEVENTH   YEAK — 1911 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JUNK 

JULY 

AUG. 

SKPT. 

OCT. 

:NOV. 

DEC. 

I.  Household  :     1.  House  and  Lot  .     . 
2.  Taxes   .... 

26.00 

26.00 

26.00 

26.00 
19  50 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 
19  66 

26.00 

8.   Water  .     . 

1  50 

1  60 

1  50 

1  70 

1  85 

2  00 

1  90 

2  10 

2  20 

1  90 

1  50 

1  50 

4.  Electric  Light     .     . 
5.  Gas  . 

1.42 
3  60 

1.37 
3  42 

1.54 
3-55 

1.26 
3  47 

1.17 
3  29 

1.10 
3  15 

1.15 
3  21 

1.20 
3  11 

1.00 
2  50 

2.40 
4  50 

1.80 
3  80 

1.95 
3  25 

6.  Fuel      

15  00 

7.  Garbage     .... 
8.  Help     .... 

.35 
4  20 

.35 

4  20 

.35 
4  20 

.35 
4  20 

.35 
4.20 

.35 
4  20 

.35 
4  20 

.35 
4  20 

.35 
4  20 

.35 
24  20 

.35 
4  20 

.35 

4.20 

9.  Laundry    .... 
10.  Furnishings    .     .     . 
11.  Fire  Insurance   . 
12.  Home  Insurance 

II.  Food:           13.  Food     

1.20 
.75 
10.50 
18.17 

40.05 

1.20 
1.50 

35.10 

1.20 
1.25 

37  90 

1.20 
.55 

32  40 

1.20 
.76 

38.60 

1.20 
1.40 

29.15 

1.20 
2.50 

36  40 

1.20 
.15 

25  50 

.75 
1.40 

28  20 

2.50 
7.60 

45  10 

2.00 
5.20 

37  42 

1.20 
1.40 

36.15 

III.  Family  :        14.  Carfare  (to  S.  F.) 
15.  Accident  Insurance 
16.  Health  

4.00 
.75 

4.00 
20.00 
.25 

4.00 
4  30 

4.00 
2  50 

4.00 
.60 

4.00 
1.10 

4.00 
.15 

4.00 
.42 

4.00 
1  05 

18  00 

22.00 

3.00 
120.00 

17.  Incidentals     .     .     . 
18.  Education      .     .     . 

19.  Recreation     .     .     . 
IV.  Religion  :     20.  Church  and  Charity 

V.  Personal:     21.  Clothing    .... 
22.  Pocket  Money    .     . 

VI.  Savings  :       23.  Savings  Bank     .     . 
24.  Life  Insurance    .     . 

2.40 
4.75 

School 

.30 
1.50 

2.40 
1.50 

3.49 

1.75 
.75 

.25 
1.50 

6.10 
1.50 

3.49 

3.10 
.75 

2.00 
1.50 

17.80 
1.50 

10.00 

3.49 

9.80 
1.50 

.40 
6.50 

6.10 
1.60 

3.49 

4.20 
.75 

.90 
1.50 

21.70 
1.50 

8.00 
3.49 

1.60 
.90 

1.50 
1.50 

30.45 
1.50 

3.49 

3.75 
.75 

.70 
1.50 

29.80 
1.50 

3.49 

2.10 
3.75 
School 
-.80 

1.50 

41.40 
1.50 

3.49 

4.05 
.75 
Vacation 
27.15 

1.50 

20.09 
1.50 

3.49 

6.70 
.75 

.10 
1.50 

2.05 
1.50 

3.49 

7.40 
.75 

.20 
3.50 

1.40 
1.50 

3.49 

2.15 
.75 

.30 
1.50 

3.50 
1.50 

3.49 

Salary,  $100  to  September  1.     Car  collision  :  Mr.  Woodward  out  of  work  10  weeks.     Salary,  Oct.  1,  §0;  Nov.  1, 
Dec.  1,  $50.     Boarder,  §25  a  month,  except  during  August.     Received  from  Accident  Insurance  Co.,  §200. 
PROBLEM.  —  Find  cash  balance  at  end  of  year. 


ACCIDENTS  51 

CAR   COLLISION 

In  August,  1911,  the  Woodward  family  went  on  their  customary  vacation,  with  the  salary 
continuing  as  usual.  At  the  end  of  the  vacation,  Mr.  Woodward  broke  his  leg  in  a  street  car 
collision  and  was  laid  up  for  ten  weeks.  The  firm  obtained  a  substitute  until  Nov.  14,  when  he 
was  able  to  return  to  work.  He  received  $100  salary  Sept.  1,  no  salary  Oct.  1  or  Nov.  1,  and 
$50  Dec.  1.  According  to  the  terms  of  his  accident  insurance  policy,  he  received  $20  a  week 
for  each  of  the  ten  weeks  that  he  was  unable  to  work.  His  expenses  for  sickness  amounted  to 
$105. 

QUESTIONS.  1.  How  much  money  did  the  family  receive  from  the  accident  insurance 
company  to  meet  the  emergency?- 

2.  How  much  of  the  insurance  could  be  devoted  to  living  expenses  after  paying  the  bill 
for  doctor  and  nurse  ? 

PROBLEM  1.  —  Find  the  monthly  expenditure  and  the  cash  balance  for  each  month  of  the 
year  1911. 

PROBLEM  2.  —  How  much  money  would  the  family  need  to  draw  from  the  bank  Dec.  1, 
1911,  to  settle  all  outstanding  bills  ?  Was  there  enough  money  in  the  bank  to  meet  this 
demand  ?  What  balance  was  left  in  the  bank  ? 

PROBLEM  3.  — •  Find  the  balance  in  the  bank  at  this  time  and  the  balance  remaining  after 
the  necessary  withdrawal  had  been  made. 


.52  FAMILY    EXPENSE    ACCOUNT 

ACCIDENT  INSURANCE 

Accident  insurance  is  mone}7  spent  as  a  safeguard  against  possible  disaster.  If  no  disaster 
.occurs,  the  money  does  not  come  back  to  the  man  who  paid  it,  but  the  family  has  the  assurance 
•that  provision  has  been  made  against  possible  accidents. 

To  obtain  insurance  against  accident,  the  breadwinner  of  the  family  tells  the  company  his 
.salary.  The  company  charges  a  rate  based  on  the  danger  of  the  occupation.  Mr.  Woodward's 
•occupation  entitled  him  to  $5  a  year  for  a  policy  which  promises  to  pay  $5  a  week  in  case  of 
accident.  A  carpenter  doing  outside  work  would  pay  three  times  the  rate  of  a  bookkeeper.  The 
•companj'-,  however,  will  not  insure  a  man  so  as  to  secure  him  a  larger  return  in  case  of  accident 
than  80  %  of  the  salary  that  he  earns  during  health.  The  man  is  said  to  pay  $5  "  premium  "  for 
:a  $  1000  policy.  In  case  of  death,  the  $1000  is  paid  to  his  widow  ;  in  case  of  accident,  $5  a  week 
is  paid  to  him  as  long  as  he  is  totally  disabled. 

In  1901  Mr.  Woodward  wished  to  take  out  an  accident  policy  for  $5000.  Explain  why 
this  would  have  cost  him  $25  a  year.  This  policy  would  have  paid  him  $25  a  week  in  case  of 
.accident.  But  in  1901  Mr.  Woodward  was  not  earning  as  much  as  $25  a  week,  and  the  com- 
pany therefore  refused  to  insure  him  for  such  a  large  amount. 

QUESTIONS.  1.  How  much  premium  did  Mr.  Woodward  pay  on  his  accident  policy  in 
1901  ?  How  much  insurance  could  he  take  out  for  this  amount  of  money  ?  How  much  would 
he  receive  each  week  in  case  of  accident  ?  How  much  money  did  he  earn  each  week  ?  Would 
he  receive  more  money  per  week  in  health  or  when  injured  ?  How  much  more  ? 

2.  Answer  the  two  questions  immediately  preceding  for  the  years  1902,  1903,  1904,  1905T 
and  1906,  noticing  the  increase  in  salary. 


ACCIDENTS  53 

3.  In   which  year  did  Mr.  Woodward  take  out  additional  accident  insurance  ?     How 
much  would  the  estate  now  receive  in  case  of  his  death  ?     How  much  would  he  receive  per 
week  in  case  of  accident  ? 

4.  How  much  money  had  the  family  paid  to  the  accident  insurance  company  by  the  time 
the  accident  occurred  ?     How  much  did  they  receive  from  the  company  ?    How  much  more  did 
they  receive  than  they  had  paid  ? 

It  must  be  borne  in  mind  that  the  family  received  a  much  greater  benefit  than  the  differ- 
ence in  the  money  paid  and  the  money  received.  If  they  had  neglected  taking  out  an  accident 
insurance  policy,  the  money  that  they  spent  each  year  in  premiums  would  have  slipped  away 
with  nothing  to  show  for  it  and  would  not  have  been  on  hand  when  needed  at  the  time  of  the 
accident.  Had  the  accident  proved  fatal,  the  company  would  have  paid  $4000  to  the  estate. 

In  the  United  States  the  census  of  1910  shows  that  11  %  of  all  deaths  are  due  to  accident. 
More  workmen  are  prevented  from  pursuing  their  occupations  on  account  of  accidental  injuries 
than  because  of  lack  of  employment. 

PROBLEM  1.  —  If  the  premiums  paid  to  the  accident  insurance  company  had  been  deposited 
in  the  savings  bank  instead,  how  much  money  would  they  have  earned  from  January,  1901,  to 
September,  1910  ?  (Notice  the  increased  insurance  taken  out  when  the  salary  rose.) 

PROBLEM  2.  —  Two  of  Mr.  Woodward's  neighbors  were  injured  in  the  same  car  collision. 
One  of  them  was  earning  $5000  a  year  and  was  insured  to  the  full  extent  of  his  salary.  How 
much  premium  did  he  pay  each  year?  How  much  "indemnity  "  would  he  receive  per  week  in 
case  of  accident  ?  How  much  money  would  the  company  pay  in  case  of  his  death  ?  He  had 
been  carrying  insurance  for  ten  years  and  four  months  and  was  unable  to  work  for  seven 


54  FAMILY    EXPENSE    ACCOUNT 

months.  How  much  more  did  he  receive  from  the  accident  insurance  company  than  he  would 
have  received  from  the  same  amount  of  money  put  in  the  savings  bank? 

The  second  neighbor  had  been  "  thinking  about  "  taking  out  insurance  against  accident,  but 
had  not  done  so.  After  two  weeks  he  died  of  his  injuries. 

PROBLEM  3.  —  Consult  an  accident  insurance  company  for  problems  such  as  might  occur 
in  your  own  home,  and  show  why  more  people  ought  to  carry  insurance  against  accidents. 

PROBLEM  4.  —  Show  by  consultation  with  the  company  that  insurance  is  a  device  by  which 
we  bear  one  another's  burdens.  Show  why  the  company  can  afford  to  pay  so  much  more 
money  in  case  of  accident  or  death  than  the  amount  of  the  premium  paid  by  the  policy  holder. 

FIRE   INSURANCE 

Fire  insurance  resembles  accident  insurance  in  the  fact  that  the  money  brings  no  return 
but  peace  of  mind,  except  in  case  of  disaster.  It  is  customary  to  insure  the  house  against  fire 
every  three  years.  Find  the  dates  when  the  fire  insurance  premiums  were  paid.  The  family 
paid  $10.50  every  three  years  for  a  protection  of  11500.  How  much  was  this  a  year?  How 
much  would  the  family  receive  in  case  of  complete  loss  by  fire  ?  What  was  the  rate  of 
insurance  ? 

It  is  usually  possible  to  take  out  fire  insurance  for  only  two-thirds  of  the  value.  On  this 
estimate,  what  was  the  rate  of  insurance  upon  the  house  and  furniture  ? 

PROBLEM  1.  —  Find  the  amount  of  fire  insurance  to  be  taken  out  on  houses  worth  the  fol- 
lowing amounts:  $2500,  $3000,  $3500,  $5000,  $6000. 

PROBLEM  2.  —  Find  the  fire  insurance  on  your  own  home.  Consult  a  fire  insurance  agent 
to  learn  how  the  value  of  the  house  is  determined. 


EXPENSES  FOR  A  YEAR 


55 


FAMILY  EXPENSE  ACCOUNT 

TWELFTH  YEAR  — 1912 


JAN. 

FEB. 

MAE. 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

DEO. 

I.  Household  :     1  .  House  and  Lot   .     . 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

26.00 

Note  on 

20.00 

20.00 

20.00 

20.00 

2.  Taxes    .          ... 

19.66 

mortgage 

19.84 

3.  Water  

1.50 

1.70 

1.65 

1.80 

1.95 

2.10 

2.30 

2.50 

2.30 

1.80 

1.60 

1.50 

4.  Electric  Light     .     . 

1.53 

3.47 

4.35 

1.35 

1.28 

1.32 

1.15 

1.20 

1.33 

1.58 

1.72 

2.10 

5.  Gas  

3.84 

10.91 

11.37 

6.42 

5.84 

4.50 

3.80 

4.20 

3.60 

4.20 

3.91 

3.85 

6.  Fuel      

6.15 

15.00 

7.  Garbage     .... 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

8.  Help      

4.20 

30.75 

29.20 

16.40 

12.20 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

9.  Laundry    .... 

1.20 

12.50 

10.80 

6.40 

5.90 

5.50 

5.50 

5.50 

5.50 

5.50 

5.50 

5.50 

10.  Furnishings    .     .     . 

6.80 

5.40 

3.20 

1.10 

1.05 

.73 

.15 

1.10 

1.20 

.85 

1.20 

2.05 

11.  Home  Insurance 

18.17 

12.  Search  Title  .     .     . 

15.00 

13.  Record  Mortgage     . 

1.25 

II.  Food:             14.  Food      

38.17 

53.24 

52.17 

49.80 

45.40 

43.20 

40.19 

42.17 

41.54 

37.18 

36.42 

37.18 

III.  Family  :        15.  Carfare 

(to  San  Francisco) 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

4.00 

16.  Accident  Insurance 

20.00 

17.  Health       .... 

.75 

2.10 

4.50 

2.05 

3.77 

1.25 

2.00 

3.75 

2.40 

4.05 

2.70 

3.15 

18.  Incidentals     . 

4.00 

7.60 

2.90 

3.40 

2.50 

1.85 

4.70 

17.25 

18.76 

18.19 

4.51 

11.24 

19.  Education      .     .     . 

2.75 

.75 

.75 

.75 

.75 

.75 

.75 

3.15 

.75 

.75 

.75 

.75 

20.  Recreation     .     .     . 

.20 

.20 

.50 

.50 

.20 

.40 

.35 

.35 

.60 

2.50 

IV.  Religion  :      21.  Church  and  Charity 

1.50 

.20 

.20 

.20 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

2.50 

1.50 

V.  Personal:      22.  Clothing    .... 

6.70 

1.20 

7.60 

8.40 

12.60 

20.90 

14.30 

11.40 

12.90 

13.40 

15.10 

21.60 

23.  Pocket  Money    . 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

VI.  Savings  :        24.  Savings  Bank 

25.  Life  Insurance   . 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

Salary,  .§100.     Bertha  Woodward  born  January  1,  1912. 

Home  mortgaged  Aug.  1,  1912.     Boarder,  .1827.50  a  month,  beginning  April  1. 

PROBLEM.  —  Find  cash  balance  at  end  of  year. 


56 


FAMILY    EXPENSE    ACCOUNT 


KEEPING    CHICKENS 


DATE 

PARTICULARS 

KEC'D 

PAID 

DATE 

PARTICULARS 

KEC'D 

PAID 

1911 

1913 

Nov. 

Built  hen  houses 

ft  15.00 

Apr. 

Lime  and  whitewash  brush 

$.75 

1912 

May 

Sold  12  doz.  eggs 

Mar. 

Bought    24-day-old     blooded 

June 

Feed 

2.50 

Minorca    chicks    @     20^; 

June 

Sold  11  doz.  eggs 

4  died;    12  of  the  others 

July 

Sold  9  doz.  eggs 

were  pullets 

4.80 

July 

Sold    8    young    roosters    for 

Mar. 

Feed 

4.00 

broiling 

$4.80 

Sept. 

Feed 

3.00 

July 

Feed 

5.50 

Sept. 

Sold  7  roosters 

$5.60 

Aug. 

Sold  7  doz.  eggs 

Sept. 

Sold  3  doz.  eggs 

? 

Sept. 

Sold  6  doz.  eggs 

Oct. 

Feed 

3.50 

Oct. 

Sold  12  hens  at  16^  per  Ib. 

7.84 

Oct. 

Sold  6  doz.  eggs 

? 

Oct. 

Sold  7  doz.  eggs 

Nov. 

Sold  12  doz.  eggs 

Nov. 

Feed 

6.00 

Dec. 

Feed 

5.40 

Nov. 

Sold  12  doz.  eggs 

Dec. 

Sold  13  doz.  eggs 

Dec. 

Sold  13  doz.  eggs 

1913 

1914 

Jan. 

Sold  14  doz.  eggs 

Jan. 

Sold  14  doz.  eggs 

Feb. 

Sold  15  doz.  eggs 

Feb. 

Feed 

1.50 

Mar. 

Feed  for  hens  and  little  chicks 

6.00 

Feb. 

Sold  15  doz.  eggs 

Mar. 
Mar. 

Hatched  2  doz.  chicks 
Sold  16  doz.  eggs 

Total 

Apr. 

Sold  16  doz.  eggs 

Cash  Balance 

MORTGAGING  THE  HOME  57 

While  recovering  from  his  accident,  Mr.  Woodward  built  hen  houses  at  a  cost  of  $15. 
He  paid  his  employer  for  the  materials  used,  in  three  instalments,  whenever  the  fowls  had 
yielded  a  profit  of  $  5.  Upon  what  dates  did  he  pay  his  employer  ?  Some  of  the  remaining 
profit  from  the  chickens  was  devoted  to  paying  for  an  invalid  chair  which  had  been  bought  on 
the  instalment  plan. 

Find  local  prices  to  see  the  extra  expense  of  buying  furniture  on  the  instalment  plan. 

PROBLEM.  —  Find  the  profit  in  the  preceding  chicken  account. 

Average  price  for  eggs  per  dozen:  January,  40^;  February,  35^;  March,  30^;  April,  30jz>;  May,  25^; 
June,  30^;  July,  35^;  August,  40^;  September,  45^;  October,  50  0 ;  November,  55  j? ;  December,  55^. 

MORTGAGING   THE   HOME 

During  January  and  February,  Mrs.  Woodward  was  seriously  ill  and  expenses  were  so 
great  that  it  was  impossible  to  live  on  $100  a  month.  The  doctor  expressed  his  willingness  to 
wait  six  months  for  his  bill,  but  other  expenses  compelled  Mr.  Woodward  to  draw  all  his  money 
from  the  savings  bank  to  pay  his  monthly  bills.  How  much  was  this  ?  During  the  spring  the 
bills  for  food  were  unpaid.  How  much  was  owing  by  June  1  ?  By  the  end  of -six  months  it 
became  evident  that  the  family  could  no  longer  continue  the  monthly  payments  of  $26  on  the 
house  and  lot.  They  therefore  decided  to  borrow  money  from  the  bank  in  order  to  pay  off  the 
builder  and  secure  enough  ready  cash  to  pay  the  doctor's  bill  and  their  grocer's  and  butcher's 
bills.  They  made  application  to  the  bank  for  a  loan  ;  the  bank  committee  inspected  the  property 
and  granted  the  amount  asked  for.  The  property  was  worth  $  2600.  The  deed  to  the  property 
was  then  obtained  from  the  builder.  (See  page  40.)  For  security  the  bank  took  a  mortgage  on 
the  property,  on  which  they  were  willing  to  loan  55  %  of  its  value. 


58  FAMILY  EXPENSE  ACCOUNT 

PROBLEM  1.  —  Find  how  much  money  the  family  received  from  the  bank  when  they 
mortgaged  their  home. 

PROBLEM  2.  —  Find  how  much  they  had  to  pay  the  builder  in  full  on  August  1,  1912. 

PROBLEM  3.  —  Find  how  much  ready  cash  the  family  would  receive  from  the  transaction. 
Was  this  sufficient  to  pay  the  doctor,  grocer,  and  the  butcher  ? 

The  note  to  the  bank  was  secured  by  a  mortgage  on  the  house  and  lot,  the  title  was 
searched,  at  a  fee  of  $15,  and  the  mortgage  recorded  in  the  Hall  of  Records  for  $1.25.  Mr.  and 
Mrs.  Woodward  suggested  repaying  the  money  semi-annually,  but  the  bank  urged  them  to  pay 
monthly,  since  they  were  receiving  a  steady  salary.  They  finally  succeeded  in  arranging  with 
the  bank  to  pay  $20  a  month,  beginning  September,  1912,  interest  7  %  per  annum. 

PROBLEM  4. —  On  Aug.  1,  1912,  the  family  owed  the  bank  $1430.  Why?  Find  the 
interest  due  on  this  money  by  Sept.  1,  1912,  at  7  %  per  annum. 

PROBLEM  5.  —  The  total  amount  paid  to  the  bank,  Sept.  1, 1912,  was  $20.  Of  this  money 
part  was  interest  and  part  was  principal.  The  preceding  problem  showed  the  amount  of 
interest  due.  Subtract  this  interest  from  $20  to  find  how  much  of  the  principal  was  paid  on 
Sept.  1.  Was  the  interest  paid  more  or  less  than  the  principal  paid? 

PROBLEM  6.  —  The  preceding  problems  show  the  principal  paid  Sept.  1.  Subtract  this 
from  $  1430  to  find  how  much  principal  was  still  due.  Find  the  interest  on  this  principal  from 
Sept.  1  to  Oct.  1  at  7  %  per  annum. 

a.  Record  the  interest  in  the  proper  column  as  shown  on  page  59. 

b.  Subtract  the  interest  from  $20  to  find  the  principal  paid. 


MORTGAGING  THE   HOME  59 

c.  Subtract  the  principal  paid  from  the  balance  due  Oct.  1  to  find  the  balance  still  due  on 
the  principal. 

PROBLEM  7. —  Complete  the  following  table  until  Jan.  1,  1915.  Rate,  1%  per  annum; 
payments,  $20  per  month,  including  principal  and  interest.  Estimate  roughly  the  length  of 
time  before  the  mortgage  is  paid  in  full.  Use  blanks  at  end  of  book  for  payments  on  mortgage. 

DATE        INTEREST        PAID  TO        PAID  ON  PRINCIPAL       BALANCE  DUE 

1912  1912  $1430.00 

Sept.  1      $8.34        Oct.  1  $11.66  1418.34 

Oct.  1          8.27        Nov.  1  11.73  1406.61 

PROBLEM  8.  —  Find  the  conditions  under  which  a  local  mortgage  has  been  obtained  and 
calculate  the  payments  for  one  year  according  to  the  above  table. 

PROBLEM  9.  —  Mr.  and  Mrs.  Woodward  discovered  that  a  payment  of  $20  a  month  was 
a  payment  of  20  %  of  their  salary  for  rent.  This  is  the  customary  fraction  of  the  income  to 
devote  to  rent.  They  had  made  a  mistake  in  assuming  that  they  could  devote  $26  to  rent 
out  of  a  salary  of  $100.  In  the  local  mortgage  upon  which  you  are  figuring,  find  what 
fraction  of  the  salary  is  devoted  to  paying  off  the  mortgage. 

PROBLEM  10.  —  After  mortgaging  the  home,  Mr.  Woodward  paid  all  his  creditors  except 
the  doctor.  He  paid  this  bill  as  rapidly  as  possible,  instead  of  putting  money  in  the  bank. 
On  Jan.  1st,  1913,  Mr.  Woodward  withdrew  $90  from  his  surplus  in  the  life  insurance  com- 
pany to  pay  outstanding  bills  (including  $30  to  the  doctor). 


60 


FAMILY  EXPENSE  ACCOUNT 


FAMILY  EXPENSE  ACCOUNT 
THIRTEENTH  YEAR  — 1913 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

DEO. 

I.  Household:     1.  House  and  Lot    .     . 
2.  Taxes     

20.00 

20.00 

20.00 

20.00 
19.84 

20.00 

20.00 

20.00 

20.00 

20.00 

20.00 

20.00 
23  39 

20.00 

3.  Water    

1.50 

1.50 

1.65 

1.71 

1  80 

2  05 

2  10 

2  40 

2  30 

1  80 

1  60 

1  55 

4.  Electric  Light     .     .     . 

1.89 
3  05 

1.96 

2  88 

1.74 
3  09 

1.65 
2  65 

1.71 
2  54 

1.52 

2  73 

1.61 

2  84 

1.73 
2  91 

1.81 
1  84 

1.91 
2  10 

2.01 

2  60 

2.15 
9  84. 

6    Fuel  

15  00 

7    Garbage 

.35 

.35 

.35 

35 

35 

35 

35 

35 

35 

35 

35 

35 

8.  Help      

4  20 

4.20 

4  20 

4.20 

4  20 

4  20 

4  20 

4  20 

2  10 

4  20 

4  20 

4  20 

9.  Laundry     

4.15 

4  15 

4.15 

4  15 

4  15 

4  15 

4  15 

4  15 

3  75 

4  15 

4  15 

4  15 

10.  Furnishings    .... 
11.  Insurance    to    Protect 
Home      

3.20 
18.17 

1.10 

1.50 

3.10 

4.40 

6.10 

2.50 

13.00 

4.25 

1.10 

3.04 

2.17 

II.  Food:            12.  Food      

III.  Family  :        13.  Carfare 
(to  San  Francisco)    . 
14.  Accident  Insurance 
15    Health  

38.10 

4.00 
3.10 

35.04 

4.00 
20.00 
2.05 

36.14 

4.00 
1.15 

39.11 

4.00 
.85 

36.05 

4.00 
6.10 

31.77 

4.00 
26.14 

32.84 

4.00 
25  23 

33.29 

4.00 
5  84 

28.17 

3.00 
4  00 

34.16 

4.00 
3  22 

38.14 

4.00 
1  50 

39.72 

4.00 
2  00 

16.  Incidentals     .... 
17.  Education  

2.10 
3.75 

1.90 

75 

11.40 
1.10 

2.10 

.75 

1.75 

.75 

2.30 
75 

1.52 
75 

.87 
4  75 

2.15 
1  75 

1.40 

2  70 

.75 
75 

3.20 
1  50 

18.  Recreation      .... 
IV.  Religion  :      19.  Church  and  Charity     . 
V    Personal  •     20.  Clothing     .... 

1.50 
1.50 
12.20 

.20 
1.50 
9.40 

.40 
1.50 
12.90 

3.0'0 
6.50 
21  15 

1.50 

1.50 
31.10 

•50 
1.50 
11  92 

.55 
1.50 
4  50 

2.10 
1.50 
40  10 

25.00 
1.50 
20  04 

3.10 
1.50 
11  40 

1.50 
4.50 
31  10 

2.40 
1.50 
32  60 

21.  Pocket  Money     .     .     . 

VI.  Savings  :       22.  Savings  Bank      .     .     . 
23.  Life  Insurance     .     .     . 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

1.50 
3.49 

Salary,  Sf  100.     Boarder,  $27.50  a  month,  except  during  August. 
PROBLEM.  —  Find  cash  balance  at  end  of  year. 


CHILDREN'S  ACCOUNTS 


61 


CHILDREN'S   ACCOUNTS 

When  the  Woodward  children  were  born,  their  grandparents  deposited  $5  in  the  bank  for 
each  of  them.  On  each  succeeding  birthday  they  deposited  $1  for  each  of  them,  with  interest 
at  4  %  per  annum. 

In  April,  1912,  Roland  Woodward  started  keeping  Belgian  hares,  on  which  he  made  a 
profit  of  $2  a  year.  During  1913,  he  received  $11.25  for  cutting  lawns  and  $13  for  running 
errands,  and  deposited  $15  in  the  bank  July  1.  On  his  eleventh  birthday,  he  drew  out  of  the 
bank  $22  for  a  bicycle. 

PROBLEM  1.  —  Complete  the  following  table  to  find  how  much  money  he  had  in  the  bank 
by  Jan.  1,  1915.  (Disregard  interest  less  than  1  cent.) 

BANK  ACCOUNT  OF  ROLAND  WOODWARD 


CORRESPONDING 

DATE 

DEPOSIT 

TIME  TO  INTEREST 

DEPOSIT  FOR 

BALANCE  IN  BANK 

1  MONTH 

Oct.  30,  1903 

$5.00 

8  mo. 

40 

15.00 

July  1,  1904 

Int.  (on  $40  for  1  mo.) 

.13 

5.13 

July  1,  1904 

Bal.  $5 

6      « 

30 

Oct.  20,  1904 

1.00 

8    « 

8 

6.13 

Jan.  1,  1905 

Int.  (on  $30  for  1  mo.) 

.10 

6.23 

Jan.  1,  1905 

Bal.  $6 

6     « 

44 

July  1,  1905 

Int.  (on  $44  for  1  mo.) 

.14 

6.37 

Oct.  30,  1905 

1.00 

8     " 

8 

7.37 

62  FAMILY  EXPENSE  ACCOUNT 

PROBLEM  2.  —  After  buying  his  bicycle,  Roland  worked  on  a  paper  route  for  1£  hours  a 
day,  Sundays  excepted,  and  earned  $  7  a  month.  With  this  money,  he  clothed  himself,  paid  for 
his  school  books,  incidental  expenses,  and  bicycle  repairs. 

Make  a  reasonable  estimate  of  his  expenses  for  one  year,  and  work  out  a  detailed  account 
of  his  receipts  and  expenses  during  the  month  of  May.  Compare  this  account  with  your  own 
expenses  for  one  month. 

PROBLEM  3.  —  Complete  a  table  similar  to  the  preceding,  to  find  how  much  money 
Frances  and  Bertha  Woodward  had  by  Jan.  1,  1915. 

PROBLEM  4.  —  On  Frances  Woodward's  seventh  birthday,  her  father  promised  to  give  her 
each  week  as  much  pocket  money  as  she  earned  from  her  garden,  if  she  would  keep  accounts. 
On  May  1,  her  balance  on  hand  was  80^.  She  bought  seed  for  10^,  sold  during  the  week, 
lettuce,  radishes,  beets,  and  beans  for  30^;  May  8,  received  pocket  money,  20^,  and  bought 
second-hand  roller  skates  for  $  1.  Write  her  expense  account,  explain  how  much  pocket 
money  her  father  paid  her  during  that  week,  and  find  her  cash  balance. 

PROBLEM  5.  —  The  following  items  represent  Frances  Woodward's  personal  expenses 
during  four  months.  Classify  them  under  the  following  heads,  and  find  the  total  expenditure 
in  each  :  Clothing,  living  expenses,  recreation,  school,  luxuries. 

Bicycle  tire,  $2;  shoe  repairs,  95^;  moving  pictures  (David  Copperfield),  10^;  scratch  paper,  5t;  ruler, 
5j>;  shoes,  $3.50;  rubbers,  75 /;  waist,  95^;  dress  material,  $  4 ;  dress  pattern,  15^ ;  thread,  10^;  picture  frame, 
40^;  Youth's  Companion,  $1.03;  unaccounted,  33^;  paper,  10^;  candy,  5j*;  .pitcher,  80?;  Sunday  school,  5^; 
outing  flannel,  30/;  birthday  present,  25? ;  fare,  $1.45;  sweater,  $5;  lunch,  24^;  circus,  f  1;  unaccounted, 
10**;  two  erasers,  10^;  toothbrush,  30X';  repairing  shoes,  $1.50;  repairing  wheel,  50^;  stickers,  10^;  class 
assessment,  15^;  Sunday  school,  op;  birthday,  25j*;  comb,  50^;  puncture,  25^;  spelling  blanks,  5^;  exercise 


COST   OF  A  CHILD  DURING  ONE  TERM  OF  SCHOOL  63 

book,  10^;  Peter  Pan,  $  1.50;  traveling  expenses,  $1.25;  hat,  50^;  picnic,  15^;  envelopes,  10 ?;  stamp  catalogue, 
50^;  stamp  album,  $1.28;  souvenir  postals,  25j*;  shoe  polish,  Wp. 

PROBLEM  6.  —  Frances  paid  the  bill  for  her  sweater  and  then  lost  the  receipted  bill,  so  that 
she  had  to  pay  the  bill  again.  What  banking  method  would  have  rendered  this  unnecessary  ? 

COST   OF   A  CHILD  DURING   ONE  TERM  OF   SCHOOL 

The  expenses  of  a  family  may  be  classified  under  four  heads :  Household  expenses,  food, 
and  family  and  personal  expenses.  In  a  certain  family  of  two  parents  and  three  children,  to 
find  the  actual  cost  of  one  twelve-year-old  child,  the  family  considered  that  the  child  cost  the 
following  fraction  of  the  whole  expense  for  a  term  of  five  months  :  Household  expenses,  one- 
fifth  of  the  whole ;  food,  one-fourth ;  family  expenses,  one-sixth.  At  this  rate  the  cost  of  a 
child  during  one  term  of  school  was  found  to  be  the  following:  Household,  $27.50 ;  food, 
$50;  family  expenses,  $15;  personal  expenses,  $16. 

The  same  items  were  added  for  a  class  of  40  children,  and  the  average  was  found  to  be  the 
following:  Household,  $18.10;  food,  $33.65;  family  expenses,  $10.80;  personal  expenses, 
$10.40. 

PROBLEM  1.  — Find  the  total  expense  of  the  child  mentioned  above  for  one  term.  How 
much  would  it  cost  his  parents  if  he  should  fail  to  be  promoted? 

PROBLEM  2.  —  Find  the  total  expenditure  of  his  family  for  household,  family,  and 
personal  expenses,  and  food  for  five  months  and  for  one  year. 

PROBLEM  3.  — How  much  more  did  the  above  child  cost  than  the  average  in  his  class? 

PROBLEM  4.  —  How  much  do  you  cost  your  parents  during  one  term  of  school  ?  What 
fraction  is  this  of  their  income  ? 


64  FAMILY  EXPENSE  ACCOUNT 

LIFE  INSURANCE 
Assessment  or  Fraternal  Insurance  Societies 

When  Mr.  Woodward  wished  to  insure  his  life,  he  found  that  there  were  two  kinds  of  insur- 
ance offered  to  him.  He  could  insure  either  in  a  fraternal  society  or  in  a  life  insurance  company 
which  had  a  "legal  reserve."  He  examined  each  kind  and  found  that  the  assessment  societies 
gave  initiations,  titles,  uniforms,  and  social  gatherings,  but  that  their  insurance  was  so  unsafe 
that  the  average  life  of  these  societies  is  only  twenty-six  years,  after  which  they  come  to  grief. 
Such  a  society  is  usually  formed  by  young  men  who  pay  a  small  assessment  in  the  beginning 
and  do  not  realize  that  there  is  not  enough  money  in  reserve  in  the  company  to  meet  the 
increasing  death  rate.  As  these  young  men  grow  older,  there  are  more  death  losses  to  be 
paid  than  formerly,  and  therefore  their  assessments  must  be  increased.  As  the  number  of 
deaths  increases  with  advancing  years,  the  assessments  become  unduly  heavy,  until  many 
members  are  obliged  to  drop  out  and  lose  all  the  money  that  they  have  paid  and  all  protection 
for  their  families.  Young  men  will  not  join  such  a  company  at  this  stage  on  account  of  the 
heavy  assessments,  so  that  its  final  failure  is  only  a  matter  of  time.  Mr.  Woodward  found  in 
the  New  York  magazine,  The  Spectator,  for  Sept.  18,  1913,  the  financial  standing  of  several 
fraternal  orders.  Here  he  found  that  the  cost  of  insurance  to  each  member  was  sometimes 
more  than  doubled  in  twenty  years !  He  therefore  knew  that  he  could  not  afford  to  join 
a  fraternal  order  ;  especially  when  he  learned  that  the  company  reserves  the  right  to  change 
the  conditions  under  which  death  benefits  are  paid,  because  the  assessments  collected  are  not 
usually  sufficient  to  pay  the  current  death  loss.  He  learned  later  that  the  organization  of 
assessment  insurance  societies  has  been  prohibited  in  many  states. 


LIFE    INSURANCE  65 

Problems  on  Assessment  or  Fraternal  Insurance 

1.  If  1000  men  aged   twenty-five  decided  to  form  an  assessment  insurance  society  and 
insure  their  lives  for  $1000  each,  how  much  must  be  paid  altogether  in  death  benefits?     If  9 
men  died  during  the  first  year,  how  much  must  be  paid  in  death  claims  at  this  time?     How 
many  men  are  left  to  pay  this  assessment  ? 

2.  If  at  the  beginning  of  the  second  year  991  men  pay  an  assessment  of  $  9.08,  how  much 
money  does  the  company  receive  ?     If  9  men  died  during  the  second  year,  how  much  must  the 
company  pay  in  death  losses?     How  many  men  are  left  to  pay  assessments  at  the  beginning  of 
the  third  year  ? 

3.  If  at  the  beginning  of  the  thirtieth  year  the  association  contains  only  490  members  and 
none  have  dropped  out  by  letting  their  payments  lapse,  how  many  have  died? 

4.  If  29  members  die  during  the  thirtieth  year,  how  much  must  be  paid  in  death  losses  at 
the  end  of  this  year?     How  many  people  are  left  to  pay  this  assessment?     How  much  must 
each  man  pay?     Why  do  members  drop  out  in  increasing  numbers  as  the  society  grows  older? 

5.  The  following  annual  assessments  were  actually  paid  for  $1000  protection  in  a  fraternal 
society  ;  this,  however,  is  an  exceptional  case. 

1st         2d         3rd         4th         5th        6th         7th         8th          9th          10th 

$10  34.50  24.00  22.00  34.50  37.00  52.00  59.50  82.00  99.50 

llth      12th        13th        14th         15th        16th        17th        18th          19th 

$112.00      99.50          114.50          129.50          129.50          147.50          164.50          194.50  204.90 

a.  Find  how  much  was  paid  to  obtain  a  protection  of  $1000. 

b.  How  much  was  the  overcharge? 


66  FAMILY  EXPENSE  ACCOUNT 

This  company  failed  before  the  member  died.  Why  was  he  unable  to  insure  in  another 
company  ?  How  much  money  did  he  lose  ? 

6.  Explain  from  the  preceding  table  the  reasons  for  the  following  statement  based  on  the 
results  of  experience:    "Assessment  and  fraternal  orders  prosper  in  the  earlier  years,  when 
deaths  are  few  and  assessments  consequently  low.     All  begin  to  lose  members  as  the  deaths 
and  assessments  increase.     Men  will  not  pay  these  largely  increased  payments  in  the  later 
years.     Consequently  they  retire  and  the  assessment  schemes  collapse." 

7.  How  much  protection  does  a  man  obtain  for  his  family  if  he  insures  in  a  society  whose 
assessments  become  so  high  that  he  cannot  pay  them  ?     How  much  protection  does  he  obtain  if 
the  company  collapses  ? 

Legal  Reserve  Insurance  Companies 

Having  learned  the  folly  of  trying  to  obtain  protection  for  his  family  by  paying  assess- 
ments in  a  fraternal  insurance  society,  Mr.  Woodward  determined  to  investigate  the  legal 
reserve  insurance  companies.  He  discovered  that  the  exposure  of  corrupt  insurance  methods 
practised  by  a  few  New  York  companies  in  1906  resulted  in  laws  which  became  effective  in  the 
state  of  New  York,  Jan.  1, 1907.  These  laws  standardized  the  contract  or  form  of  policy  which 
the  company  makes  with  any  one  in  the  United  States  who  insures  with  them.  He  found, 
however,  that  because  the  United  States  does  not  regulate  or  demand  uniform  charters  for  life 
insurance  for  all  companies,  it  is  possible  for  them  to  operate  under  different  laws  in  different 
states.  When  New  York  regulated  its  life  insurance  companies  in  1907,  some  companies  left 
the  state  because  they  did  not  wish  their  investments  so  carefully  controlled  !  Mr.  Woodward 
learned  therefore  that  the  safest  life  insurance  companies  to  invest  in  are  those  which  operate 


LIFE   INSURANCE  67 

at  the  present  time  in  the  states  of  New  York,  Connecticut,  Massachusetts,  and  New  Jersey, 
because  there  the  laws  of  the  states  exert  control  over  the  funds  of  the  company  to  insure  safety 
to  the  policy  holder.  He  therefore  investigated  such  companies  to  find  how  their  principles 
made  their  protection  safer  than  that  offered  by  the  assessment  insurance  societies.  He  found 
that  the  legal  reserve  insurance  companies  were  based  on  the  principle  of  reserving  part  of  the 
money  paid  in  by  each  policy  holder,  to  be  stored  up  as  an  additional  safeguard  so  that  his  family 
will. receive  protection  when  he  dies :  hence  the  name  "legal  reserve  insurance  company." 

8.  Tables  have  been  made  based  on  a  large  range  of  statistics  which  show  the  number  of 
deaths  a  year.  Thus,  if  there  are  100,000  children  in  the  United  States  at  the  age  of  ten  whose 
record  is  kept,  it  will  be  found  that  during  their  20th  year  of  age  723  will  have  died ;  during 
their  30th  year  720  will  have  died ;  during  their  40th  year  765  will  have  died,  etc.  There  is 
a  mathematical  law  governing  these  records  which  is  so  accurate  that  it  can  be  used  by  in- 
surance companies  in  determining  the  death  claims  that  they  will  have  to  pay  each  year. 

In  a  legal  reserve  insurance  company,  the  amount  needed  to  pay  death  claims  for  each  year 
is  calculated  with  exactness  from  these  mathematical  tables,  and  the  money  needed  by  the 
company  for  this  purpose  is  collected  from  its  policy  holders,  who  pay  it  as  part  of  their  annual 
"  premiums."  Further  information  concerning  legal  reserve  may  be  obtained  from  the  state  in- 
surance commissioner. 

QUESTIONS.  Mr.  Woodward  was  married  at  the  age  of  twenty-five  and  insured  his  life  at 
that  time  for  $  1000.  In  1904,  when  he  was  earning  a  larger  salary,  he  insured  his  life  for 
$  1000  additional,  for  which  he  had  to  pay  a  higher  rate  because  he  was  now  three  years  older. 

1.    How  much  did  Mr.  Woodward  pay  for  his  life  insurance  in  1901  ? 


68  FAMILY  EXPENSE  ACCOUNT 

2.  If  he  had  died  during  August  of  that  year, .how  much  would  his  widow  have  received  ? 

3.  How  much  would  the  family  have  profited  from  the  insurance  company  ? 

4.  When  did  Mr.  Woodward  increase  the  amount  of  life  insurance  he  was  carrying  ?     How 
much  did  he  pay  a  year  for  the  second  $1000  policy  ? 

5.  How  much  would  his  estate  receive  from  the  insurance  company  if  Mr.  Woodward  died 
in  1904  ? 

Problems  on  Legal  Reserve  Insurance 

PROBLEM  1.  —  If  1000  men  aged  25  decide  to  form  a  legal  reserve  insurance  company  and 
insure  their  lives  for  f  1000  each,  if  they  each  pay  a  $24  premium  in  advance  each  year,  how 
much  money  does  the  company  receive  at  the  beginning  of  the  first  year  ?  If  this  money  is  in- 
vested at  3  %,  how  much  money  does  the  company  control  at  the  end  of  the  first  year?  If  nine 
men  died  at  the  end  of  the  first  year,  how  much  must  be  paid  in  death  claims  at  this  time  ? 

PROBLEM  2.  — a.  If  the  expenses  for  running  the  company  average  $  3.05  per  member,  how 
much  money  remains  with  the  company  at  the  end  of  the  first  year  ? 

b.  If  the  surplus  (explained  later)  to  be  returned  to  each  member  averages  $  3.33  per 
member,  how  much  money  is  left  with  the  company  ? 

It  is  evident  that  at  the  end  of  the  first  year,  the  company  holds  in  reserve  a  much  larger 
sum  of  money  than  was  needed  to  pay  the  death  claims  and  other  expenses  for  the  year.  It  is 
this  reserve  which  gives  stability  to  the  legal  reserve  insurance  companies. 

If  no  new  members  joined  after  the  first  year  it  is  evident  that  the  amount  of  reserve  paid  in 
each  year  would  decrease  as  the  number  of  members  decreases,  yet  there  would  still  be  enough 
funds  to  pay  the  death  claims  of  the  last  survivor.  This  is  true  because  the  amount  of  the  re- 


LIFE   INSURANCE  69 

serve  and  the  interest  it  will  earn  are  calculated  with  exactness  to  protect  each  member,  and  are 
included  as  part  of  the  premium  paid  each  year.  These  calculations  are  based  upon  tables 
called  "  American  mortality  tables,"  showing  the  death  rate  per  year. 

Companies  of  course  are  not  formed  under  exactly  these  conditions,  but  the  principle  of  the 
legal  reserve  is  the  same  as  in  the  preceding,  and  explains  why  it  is  practically  impossible  for 
a  legal  reserve  insurance  company  to  fail  after  once  being  well  established. 

PROBLEM  3.  —  At  the  age  of  25  the  mortality  tables  show  that  the  average  number  of  years 
remaining  in  a  man's  life  is  39.  If  he  insures  at  this  time  the  reserve  set  apart  from  his  premium 
must  be  sufficiently  large  so  that  at  the  end  of  39  years  it  will  accumulate  $1000. 

Tables  show  that  if  $12.25  is  invested  annually  at  3  %  it  will  accumulate  $1000  in  39 
years.  If  a  man  insures  at  the  age  of  25  and  pays  a  premium  of  $24,  if  $12.25  of  this  premium 
is  reserved  to  pay  his  own  death  claim,  how  much  is  left  ? 

PROBLEM  4. —  If  a  man  aged  25  pays  a  $24  premium  each  year  and  $12.25  is  set  aside 
out  of  this  premium  as  a  legal  reserve  to  pay  his  own  death  claims,  if  $  10  is  set  aside  to  pay 
the  death  claims  of  those  who  have  died  during  the  year,  the  remainder  of  the  premium  is  de- 
voted to  current  expenses.  How  much  will  this  be  ? 

There  are  three  items  which  vary  so  that  the  insurance  company  unintentionally  overcharges 
the  policy  holder  and 'accumulates  a  surplus.  The  three  items  which  help  to  accumulate  the 
surplus  arise  from  the  following : 

1.  Not  so  many  people  die  as  are  allowed  for  in  the  tables,  except  in  cases  of  epidemic. 
Careful  medical  examinations  bar  out  those  people  below  the  standard  which  a  legal  reserve 
company  considers  a  safe  risk. 


70  FAMILY  EXPENSE  ACCOUNT 

2.  The  company  may  invest  its  premiums  at  a  higher  rate  of  interest  than  3  %,  the  usual 
reserve  interest  rate.     The  earnings  above  3%  are  put  into  the  surplus. 

3.  The  estimated  expenses   of  the  company  may  be  higher  than  the  actual  expenses. 
(This  item  was  not  considered  in  the  preceding  table.) 

If  the  policy  holder  buys  a  participating  policy,  or  a  policy  which  participates  in  the  surplus 
earnings  of  the  company,  his  share  of  this  surplus  is  returned  to  him  annually  or  else  is  in- 
vested by  the  company  so  as  to  bring  him  increased  insurance.  This  return  of  the  surplus 
to  the  policy  holders  each  year  is  the  distinguishing  feature  of  a  strictly  mutual  company. 

Mr.  Woodward  found  that  he  must  decide  between  buying  a  participating  or  non-partici- 
pating policy.  In  the  former  case,  his  share  of  the  company's  surplus  would  either  be  returned 
to  him  each  year  or  credited  to  his  account  by  the  company  to  buy  him  additional  insurance. 
If  he  bought  a  non-participating  policy,  he  would  have  no  surplus  returned  to  him. 

At  the  age  of  twenty-five,  for  a  participating  policy  he  must  pay  $20.14 ;  for  a  non-partic- 
ipating policy  he  must  pay  $16.36.  It  therefore  became  a  question  of  paying  a  higher  premium 
and  getting  the  money  back  later  in  the  form  of  surplus  (sometimes  called  dividends)  or  paying 
a  lower  premium  and  getting  no  money  returned  except  $1000  at  death.  Mr.  Woodward  de- 
cided to  buy  the  participating  policy,  because  this  would  compel  him  to  pay  more  money  for  his 
insurance  and  thus  build  up  a  surplus  for  him  in  the  company  upon  which  he  could  draw  in 
time  of  need  or  which  he  could  use  to  purchase  additional  insurance.  He  knew  that  if  he 
bought  the  lower-priced  non-participating  policy,  that  the  money  that  he  saved  here  would  be 
spent  on  minor  items  in  the  family  budget  and  that  there  would  be  nothing  to  show  for  it. 

The  surplus  that  was  returned  to  him  on  the  policy  that  he  took  out  at  25  years  of  age  in- 
creased from  year  to  year,  as  shown  in  the  first  of  the  following  tables.  At  the  age  of  twenty- 


LIFE   INSURANCE 


71 


seven  he  took  out  a  second  participating  policy  for  $  1000.  This  policy  also  returned  an 
annual  surplus  or  dividend  as  shown  in  the  second  table. 

In  January,  1913,  when  Mr.  Woodward  was  37  years  of  age,  he  was  obliged  to  withdraw  $60 
from  the  dividends  that  had  been  accumulating  with  the  company  in  order  to  meet  expenses. 

PROBLEM  5.  —  Find  the  amount  which  was  due  Mr.  Woodward  as  his  share  of  the  surplus 
on  each  of  his  policies  when  he  withdrew  from  his  surplus  on  January  1,  1913. 


END  OF 

YltAR 

SURPLUS 

RETURNED 

END  OF 
YEAR 

SURPLUS 

RETURNED 

Age  26     

1 
2 

$3.33 
3.48 

Age  28     

1 

2 

$3.48 
3.65 

3 

3.64 

3 

3.83 

4 

3.79 

4 

4.00 

5 

3.95 

5 

4.18 

Age  35     , 

6 
7 
8 
9 
10 
11 
12 

4.12 
4.30 
4.48 
4.66 
4.86 
5.05 
5.27 

Age  35     

6 

7 
8 
9 

4.37 

4.58 
4.78 
4.99 

Jan   1,  1913      

Jan.  1,  1913      

PROBLEM  6.  —  If  a  man  aged  35  insures  in  a  legal  reserve  company  and  takes  out  a  non- 
participating  policy,  he  pays  $18.50  annually  for  1 1000  protection.  If  he  takes  out  a  par- 
ticipating policy,  he  pays  $  26.35  annually  and  receives  surplus  as  follows: 


72  FAMILY  EXPENSE  ACCOUNT 


1st  year 

2d 

8d 

4th 

5th 

6th 

7th 

8th 

9th 

10th 

$3.95 

4.17 

4.42 

4.66 

4.91 

5.18 

5.45 

5.73 

6.02 

6.32 

llth 

12th 

18th 

14th 

15th 

16th 

17th 

18th 

19th 

20th 

$6.63 

6.96 

7.30 

7.65 

8.01 

8.40 

8.79 

9.21 

9.63 

10.06 

Show  the  difference  in  cost  to  the  policy  holder  between  buying  a  non-participating  policy 
at  a  lower  annual  premium  and  a  participating  policy  at  a  higher  annual  premium  and  receiving 
surplus  each  year  for  the  latter,  during  a  period  of  twenty  years. 

Twenty- Year  Endowment  Policies 

Some  of  his  friends  advised  Mr.  Woodward  to  buy  a  20-year  endowment  policy  which  could 
be  withdrawn  at  the  end  of  20  years  or  else  allowed  to  stay  with  the  company  and  afford  pro- 
tection to  his  family  without  his  paying  any  premium  after  the  first  20.  He  found,  however, 
that  he  was  not  able  to  afford  the  higher  premium. 

PROBLEM  7.  —  At  the  age  of  25,  the  annual  premium  for  an  ordinary  life  insurance  policy 
is  $20.14,  and  for  a  twenty-year  endowment  policy  $48.03.  At  the  age  of  28  the  ordinary  life 
insurance  cost  $21.69,  and  the  twenty-year  endowment  cost  $48.41.  How  much  more  would 
Mr.  Woodward  have  had  to  pay  annually  for  his  two  policies  if  he  had  bought  twenty-year  en- 
dowment policies  than  if  he  had  bought  ordinary  life  policies  ? 

It  often  happens  that  after  a  man  has  been  working  15  or  20  years,  he  is  earning  a  salary 
large  enough  so  that  he  wishes  to  change  his  ordinary  life  insurance  policy  to  a  twenty-year 
endowment  policy.  This  he  can  do  by  paying  the  difference  between  the  premiums  for  the 
two  kinds  of  policy  from  the  time  he  started  to  insure  his  life. 


EXPENSES   FOR  A  YEAR 


73 


FAMILY  EXPENSE   ACCOUNT 
FOURTEENTH  YEAR  — 1914 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT. 

OCT. 

Nov. 

DEC. 

I.  Household  :   1.  House  and  Lot     .     .     . 
2    Taxes      

20.00 

20.00 

20.00 

20.00 
23.39 

20.00 

20.00 

20.00 

20.00 

20.00 

20.00 

20.00 
22.51 

20.00 

3    Water    

1.55 

1.50 

1.65 

1.70 

1.80 

2.05 

2.00 

2.15 

2.10 

1.90 

1.60 

1  50 

4.  Electric  Light  .... 
5    Gas    

2.91 
3.10 

2.84 
3.15 

1.95 
3.10 

1.72 
3.05 

1.81 
3.20 

1.60 
3.16 

1.40 
3.10 

1.50 
3.50 

1.84 
3.05 

1.91 
3.10 

2.05 
3.15 

2.10 
3.40 

6    Fuel  

5.00 

15.00 

7    Garbage      

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

.35 

35 

8    Help  

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

4.20 

2.10 

4.20 

4.20 

4.20 

9.  Laundry      

4.15 

4.15 

4.15 

4.15 

4.15 

4.15 

4.15 

4.16 

4.15 

4.15 

4.15 

4.15 

10    Furnishings 

.20 

2.10 

1.40 

5.90 

2.40 

3.10 

2.40 

1.10 

8.50 

3.40 

1.10 

12  80 

11.  Insurance     to     protect 
Home      

16.50 

12.  Fire  Insurance     .     .     . 
II    Food  •           13    Food       

10.50 
42.10 

43.04 

41.37 

39.18 

41.19 

35.14 

32.17 

29.15 

38.17 

39.18 

41.55 

42  41 

III.  Family:       14.  Carfare 
(to  San  Francisco)    . 
15.  Accident  Insurance  .     . 
16    Health    

4.00 
.42 

4.00 
20.00 
.49 

4.00 
6.17 

4.00 
3.10 

4.00 
4.40 

4.00 
.14 

4.00 

.84 

4.00 
1.17 

3.00 
7.90 

4.00 
8.40 

4.00 
1.10 

4.00 
.74 

17.  Incidentals  

2.10 

1.15 

3.15 

1.40 

6.11 

7.14 

2.42 

3.17 

4.10 

2.05 

1.17 

1.42 

18    Education 

3  75 

76 

.75 

2  75 

.75 

.75 

75 

4.74 

4  76 

75 

75 

1  75 

19    Recreation  

.20 

.20 

2.00 

.80 

2.50 

1.10 

4.00 

20.00 

2.10 

2.50 

1.10 

1  45 

IV.   Edigion  :    20.  Church  and  Charity 
V    Personal  '    21    Clothing           .... 

1.50 
2.10 

1.50 
3.05 

1.50 
21.17 

6.50 
14.11 

1.50 
22.04 

1.50 
14.71 

1.60 

32.15 

1.50 
10.19 

1.50 
11.14 

1.50 
37.49 

4.50 
12.40 

1.50 
11  80 

22    Pocket  Money 

1.50 

1.50 

1.50 

1  50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1.50 

1  50 

VI.    Savings:      23.  Savings  Bank  
24.  Life  Insurance     .     .     . 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

Salary,  $  100.     Boarder,  $27.50  a  month,  except  during  July. 

PROBLEM.  —  Find  the  expenses  and  income  for  each  month.     Place  in  the  savings  bank  as  much  as  possible. 


74  FAMILY  EXPENSE  ACCOUNT 

LUXURY    VERSUS  CHARITY 

When  they  considered  how  much  they  should  give  for  the  support  of  church  and  charity, 
Mr.  and  Mrs.  Woodward  realized  that  they  preferred  to  live  in  a  city  where  there  was  the 
influence  of  the  church,  rather  than  in  one  where  there  was  no  such  help.  They  saw  therefore 
that  a  church  can  exist  only  as  the  citizens  support  it  and  that  they  must  do  their  share. 

On  account  of  the  high  cost  of  the  necessities  of  life,  the}r  saw  that  if  they  gave  to  the 
church  only  what  was  left  after  paying  the  month's  bills,  their  money  would  be  spent  in  other 
ways  instead.  They  therefore  planned  to  set  aside  a  definite  sum  each  month  for  the  support 
of  the  church  and  to  consider  it  as  a  necessary  expense. 

When  they  discussed  the  subject  of  charity,  they  realized  that  if  they  gave  indiscriminately 
to  those  of  the  needy  whom  they  happened  to  meet,  there  would  be  no  money  remaining  for  the 
support  of  widows  and  orphans  and  the  worthy  poor.  They  decided,  therefore,  to  contribute 
to  a  few  worthy  causes  which  would  use  the  money  wisely  for  the  good  of  others. 

For  some  time  the  problem  of  the  amount  of  money  that  they  should  devote  to  charity 
remained  unsolved.  Finally,  they  decided  that  sometimes  they  indulged  in  extravagant  pur- 
chases, which  were  not  necessary  or  helpful  to  the  standard  of  life  that  they  were  maintaining. 
It  seemed  only  reasonable,  therefore,  that  they  ought  to  be  able  to  give  away,  for  the  benefit  of 
others,  as  much  money  as  they  devoted  to  their  own  luxury.  This  rule  they  adhered  to  with 
very  fair  regularity.  When  money  was  spent  for  gum,  ice  cream  sodas,  unnecessarily  expensive 
clothing,  etc.,  etc.,  a  corresponding  amount  was  placed  in  the  charity  bank  at  home  and  emptied 
twice  a  year  on  Charity  Day  and  at  Thanksgiving  time. 

The  question  of  what  was  a  reasonable  expenditure  for  self-improvement,  and  what  was 
luxury,  showed  that  a  vacation  was  often  a  necessity  for  the  health  and  spirits  of  the  family, 


LUXURY    VERSUS  CHARITY  75 

but  that  certain  thoughtless  expenditures  while  on  the  vacation,  and  at  other  times,  con- 
tributed nothing  to  the  improvement  of  the  family,  but  were  mere  extravagances.  The  same 
logic  applied  to  various  expenditures  for  clothing,  entertaining,  food  between  meals,  and 
other  minor  expenses.  As  the  family  came  to  consider  their  expenditure  for  these  items  in 
relation  to  what  they  might  give  for  the  benefit  of  those  less  fortunate  than  themselves, 
they  began  to  realize  that  there  is  a  certain  responsibility  attached  to  spending  money.  They 
saw  that  the  habit  of  halving  the  amount  spent  on  extravagance,  in  order  to  devote  the  other 
half  to  charity,  not  only  increased  their  self-respect,  and  helped  the  community,  but  also  gave 
them  a  self-control  in  money  matters  which  stood  them  in  good  stead  in  case  of  emergencies. 

PROBLEM  1.  —  How  much  did  the  Woodward  family  devote  to  church  and  charity  each 
year? 

PROBLEM  2.  —  How  much  could  be  accomplished  with  such  an  amount  of  money  ?  To 
answer  this  question,  consult  the  reports  of  the  charity  organization  and  of  a  church  to  see  the 
amount  actually  spent  to  maintain  the  high  standard  of  ideals  in  the  community. 

PROBLEM  3.  —  How  much  money  did  you  spend  on  luxuries  during  the  last  month  ?  If 
you  spent  half  this  amount  upon  yourself  and  the  other  half  for  church  and  charity,  to  what 
objects  would  you  devote  it  ? 

PROBLEM  4.  —  Keep  a  record  of  your  personal  expenses  month  by  month  and  see  how  this 
rule  works  in  your  own  case. 

PROBLEM  5.  —  Find  the  amount  spent  by  some  family  during  one  year  upon  luxury,  and 
compare  it  with  the  amount  given  to  church  and  charity.  Explain  why,  as  families  become 
very  wealthy,  they  should  devote  more  money  to  the  benefit  of  others  than  to  unnecessary 
expenses  for  themselves. 


76  FAMILY  EXPENSE  ACCOUNT 

THE  OUTLOOK  FOR  THE  FUTURE 

By  January,  1915,  Mr.  and  Mrs.  Frank  Woodward  had  been  married  fourteen  years. 
They  knew  that  in  a  very  short  time  their  home  would  be  their  own.  They  knew  also  that 
although  their  cash  reserve  against  emergencies  had  not  yet  regained  the  standard  which  they 
tried  to  maintain,  they* were  protected  by  several  forms  of  insurance. 

1.  Fire  Insurance.  —  The  house  was  protected  in  case  of  fire. 

2.  Debt  on  Home.  —  The  note  at  the  bank  was  protected  by  a  5-year  renewable  and  con- 
vertible term  policy  in  case  of  Mr.  Woodward's  death.     This  insurance  would  naturally  cease 
when  the  house  was  paid  for,  but  the  policy  could  be  continued  to  cover  the  children's  educa- 
tion and  other  coming  expenses. 

3.  Accident  Insurance.  —  The  family  was  protected  by  an  accident  policy  which  guaranteed 
$20  a  Aveek  if  accident  disabled  the  breadwinner  and  $4000  in  the  event  of  death  by  accident. 

4.  Accident  Insurance.  —  In  January,  1914,  the  new  compensation  law  went  into  effect  in 
California.     According  to  the  provisions  of  this  act,  if  Mr.  Woodward  was  hurt  while  working 
for  the  hardware  store,  his  employer  would  have  to  pay  all  his  hospital  expenses  during  the 
first  two  weeks,  and  65  %  of  his  wages  during  the  next  four  years  if  he  was  so  disabled  that  he 
could  not  return  to  work.     In  case  of  his  death  by  accident,  the  company  would  pay  three 
times  his  annual  wage. 

5.  Life  Insurance.  —  At  the  time  of  his  death,  the  life  insurance  company  would  pay  his 
widow  the  face  of  the  life  insurance  policy,  $2000. 

In  the  event  of  Mr.  Woodward's  death,  the  5-year  renewable  term  policy  would  bring  in 
$1500  to  be  paid  on  the  debt  on  the  house  and  thus  give  Mrs.  Woodward  a  home  almost  free 


OUTLOOK  FOR  THE  FUTURE  77 

from  mortgage.  The  life  insurance  of  $2000  would  also  become  due,  but  the  policy  was  so 
arranged  that  the  insurance  company  would  invest  the  money  at  5  %  and  pay  the  widow  or  her 
heirs  a  monthly  income  of  $8.33.  How  is  this  amount  determined? 

In  case  of  death  by  accident  an  additional  $4000  would  fall  due,  which  was  also  arranged 
to  be  invested  at  5  %  and  the  income  paid  monthly.  How  much  would  the  widow  receive  each 
month  ?  In  case  of  death  by  accident  while  working  in  the  store,  the  employer  must  pay  three 
times  the  annual  wage.  How  much  monthly  income  would  this  bring  in  ? 

Such  arrangements  for  investing  the  face  of  the  policy  and  paying  the  interest  in  monthly 
instalments  secured  Mrs.  Woodward  against  improper  investment  of  funds.  The  records  show 
that  money  paid  in  death  claims  is  usually  dissipated  within  five  years. 

Another  source  of  protection  came  from  the  increasing  value  of  the  land  upon  which  the 
house  was  built.  The  lot  could  have  been  sold  for  many  times  its  original  value,  but  the  diffi- 
culty of  finding  another  lot  which  could  be  bought  at  a  moderate  price  and  in  a  convenient 
location  prevented  the  sale. 

The  family  realized  that,  although  they  had  little  ready  money,  they  had  a  sense  of  security 
concerning  the  future  which  made  them  satisfied  to  get  ahead  slowly. 

It  must  be  borne  in  mind  that  this  family  had  a. larger  income  than  most  in  this  country. 
Mr.  Woodward  was  receiving  $100  a  month,  yet  the  family  were  obliged  to  live  carefully  to 
keep  within  this  income.  Recent  statistics  show,  however,  that  the  average  salary  earned 
throughout  the  United  States  is  less  than  $700  a  year. 

PROBLEM  1.  —  Find  the  time  when  the  mortgage  will  be  paid  off. 
PROBLEM  2. —  Find  the  balance  in  the  savings  bank. 


78 


FAMILY  EXPENSE  ACCOUNT 


$ 

Six  Per  Cent  Interest  Table 

$ 

i 

da. 

2 
da. 

3 

da. 

5 
da. 

6 
da. 

10 

da. 

15 
da. 

1 
mo. 

2 

mo. 

3 

mo. 

4 

mo. 

5 

mo. 

6 

mo. 

7 
mo. 

8 
mo. 

9 

mo. 

10 

mo. 

11 
mo. 

1 

yr. 

2 

yr. 

3 

yr. 

1 

.OOOJ 

.OOOJ 

.000£ 

.0001 

.001 

.001§ 

.002i 

.005 

.01 

.015 

.02 

.025 

.03 

.035 

.04 

.045 

.05 

.055 

.06 

.12 

.18 

1 

2 

.OOOJ 

.000§ 

.001 

.001§ 

.002 

.003§ 

.005 

.01 

.02 

.03 

.04 

.05 

.06 

.07 

.08 

.09 

.10 

.11 

.12 

.24 

.36 

2 

3 

.OOOA 

.001 

.OOH 

.002^ 

.003 

.005 

.007J 

.015 

.03 

.045 

.06 

.075 

.09 

.105 

.12 

.135 

.15 
.20 

.165 

.18 

.36 

.54 

3 

4 

.000§ 

.OOH 

.002 

.0031 

.004 

.006| 

.01 

.02 

.04 

.06 

.08 

.10 

.12 

.14 

.16 

.18 

.22 

.24 

.48 

.72 

4 

5 

.0001 

.001  § 

.002£ 

.004J 

.005 

.008J 

.012* 

.025 

.05 

.075 

.10 

.125 

.15 

.175 

.20 

.225 

.25 

.275 

.30 

60 

.90 

5 

6 

.001 

.002 

.003 

.005 

.00(5 

.01 

.015 

.03 

.06 

.09 

.12 

.15 

.18 
.21 

.21 

.24 

.27 

.30 

.33 

.36 

72 

1.08 

6 

7 

.oou 

.002J 

.003* 

.0051 

.007 

.011} 

.017J 

.035 

.07 

.105 

.14 

.175 

.245 

.28 

.315 

.35 

.385 

.42 

.84 

1.26 

7 

8 

.OOH 

.002§ 

.004 

.006i 

.008 

.013i 

.02 

.04 

.08 

.12 

.16 

.20 

.24 

.28 

.32 

.3(5 

.40 

.44 

.48 

.96 

1.44 

8 

9 

.001* 

.003 

.004| 

.007^ 

.009 

.015 

.022J 

.045 

.09 

.135 

.18 
3D 

.225 

.27 
.30 

.315 

.3(5 
.40 

.405 

.45 

.495 

.54 

1.08 
1.20 

1.62 
1.80 

9 

10 

.oois 

.003J 

.005 

.0081 

.01 

.0165 

.025 

.05 

.10 

.15 

.25 

.35 

.45 

.50 

.55 

.60 

10 

$ 

1 

2 

3 

5 

6 

10 

15 

1 

.  2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

1 

2 

3 

$ 

DAYS 

MONTHS 

YEARS 

USE   OF  INTEREST   TABLES  79 

THE  USE   OF   INTEREST  TABLES 

Banks  are  in  the  habit  of  using  interest  tables  such  like  the  preceding  for  the  purpose  of 
computing  interest  quickly.  It  is  impossible  to  use  these  tables  without  understanding  how 
to  compute  simple  interest.  After  having  learned  this,  the  table  saves  so  much  time  that  it  is 
worth  mastering.  This  table  is  a  shorter  form  of  the  interest  tables  commonly  used  in  banks. 

Formation  of  Tables 

After  noticing  the  arrangement  of  the  completed  table,  each  pupil  will  show  his  own 
power  by  filling  out  the  blank  form  at  the  end  of  the  book  and  thus  make  his  own  table.  To 
fill  out  the  table  with  greatest  economy,  work  the  following  problems  in  order. 

PROBLEM  1.  — Calculate  the  interest  on  $1  for.  one  year  at  6%,  on  $2  for  one  year,  on 
$3,  etc.,  up  to  $10  for  one  year.  Similarly  for  two  years  and  three  years.  Keep  these  results 
on  scratch  paper  until  verified.  Enter  them  on  the  three  right-hand  columns  on  the  blank 
table  at  the  end  of  the  book,  insisting  that  a  very  fine  pen  be  used,  also  clear,  small,  legible 
figures.  Insist  also  that  the  decimal  points  be  kept  under  each  other  in  column,  and  guard 
against  a  favorite  error  of  adding  a  zero  in  the  mills  place. 

PROBLEM  2.  —  Use  the  interest  for  one  year  as  a  basis  for  computing  interest  for  one 
month,  by  dividing  each  amount  by  twelve.  Get  the  interest  for  two  months  by  dividing  the 
interest  for  a  year  by  six,  for  three  months  by  dividing  the  interest  for  a  year  by  four.  Check 
these  results  by  seeing  whether  the  interest  for  two  months  is  twice  the  interest  for  one  month^ 
three  months'  interest  is  three  times  one  month,  etc.  Copy  these  columns  carefully  into  the 
table.  The  decimal  point  can  come  at  the  extreme  left  of  the  allotted  space.  Express  mills  as 
decimals,  but  fractions  of  mills  as  common  fractions. 


80  FAMILY  EXPENSE  ACCOUNT 

PROBLEM  3.  —  Complete  columns  for  five,  seven,  eight,  nine,  ten,  and  eleven  months  by 
multiplying  the  interest  for  one  month  by  five,  seven,  and  eight,  etc.  Check  by  noticing 
whether  the  interest  for  five  months  is  equal  to  the  sum  of  the  interest  for  one  month  and  four 
months,  etc.,  copying  these  results  accurately  on  the  table. 

PROBLEM  4.  —  Practice  from  the  tables  such  problems  as  the  following :  (a)  Find  the 
interest  on  $50  for  2  months  @  6%.  (5)  Find  on  the  card  the  interest  on  $5  for  2  months. 
Since  the  interest  on  $  5  for  2  months  is  5^,  the  interest  on  $  50  for  2  months  is  ten  times  the 
interest  on  $5,  or  50^,  or  "point  five  zero." 

NOTE.  —  It  is  necessary  to  insist  upon  reading  money  by  decimals,  in  order  to  make  work  absolutely  reliable 
in  later  years.  No  error  is  more  prevalent  than  failure  to  multiply  correctly  by  ten  and  one  hundred  in  reading 
and  writing  amounts  of  money. 

NOTE  2.  —  In  practicing  reading  from  the  table,  use  the  printed  table.  Hold  it  in  the  left  hand,  do  not 
leave  it  lying  on  the  desk.  Use  a  strip  of  blank  card  or  paper  in  the  right  hand  to  cover  the  numbers  not  needed 
and  thus  insist  on  finding  the  numbers  desired. 

PROBLEM  5.  —  Find  the  interest  on  $860  for  6  months  @  6%. 

Use  the  interest  table  to  show  the  following  : 

The  interest  on  $8  for  6  mo.  is  $.24, 

therefore  the  interest  on  $800  for  6  mo.  is  $24. 

Read  this  result  at  sight.     Use  no  scratch  work. 

The  interest  on  $6  for  6  mo.  is  $  .18, 

therefore  the  interest  on  $60  for  6  mo.  is  $1.80.     Explain. 

These  results  should  be  written  as  follows : 

Interest  on  $800  for  6  mo.  is  $24 
Interest  on  $60  for  6  mo.  is  $1.80 
Interest  on  $860  for  6  mo.  is  $26.80 


PROBLEMS   IN   INTEREST  81 

PROBLEM  6.  —  After  thoroughly  training  in  handling  problems  from  the  table,  the  follow- 
ing form  may  be  used  to  advantage.     Find  the  interest  on  -1970  for  six  years  four  months. 


PRIN. 

TIME 

INTEREST 

900 

6yr. 

$324 

900 

2  mos. 

9 

70 

6yr. 

25.20 

70 

2  mos. 

.70 

Total  $358.90 

PROBLEMS  IN   INTEREST,  USING  TABLE 

Use  the  printed  table  to  find  the  interest  in  each  of  the  following  problems.  Hold  the 
table  in  the  left  hand  and  write  nothing  except  the  amount  of  interest,  as  in  the  last  column  of 
Problem  6  preceding.  Train  yourself  to  multiply  by  10,  100,  and  1000  on  sight  and  waste  no 
time  and  energy  in  unnecessary  movements.  Hold  the  table  close  to  the  writing  so  that  the 
head  need  not  turn  from  one  to  the  other. 

Find  the  interest  at  6  %  per  annum  on  the  following : 

1.  $420  for  Syr.  6.    $  4001  for  2  yr.  8  mo. 

2.  $  640  for  1  yr.  2  mo.  7.    $  3375  for  4  yr.  5  mo. 

3.  $  320  for  3  yr.  1  mo.  8.    $  871  for  9  yr.  4  mo. 

4.  $32  for  6  yr.  8  mo.  9.    I  8070  for  7  yr.  7  mo. 

5.  $  3200  for  6  yr.  8  mo.  10.    1 9006  for  8  yr.  3  mo. 


82 


FAMILY  EXPENSE  ACCOUNT 


Interest  at  6  %  may  be  used  as  the  basis  for  computing  interest  at  other  rates.     Thus : 

3  %  is  \  of  6  %,  therefore  divide  amt.  in  table  by  2.     Why  ? 
2%  is  ^  of  6%,  therefore  divide  amt.  in  table  by  3.     Explain. 
1  %  is  \  of  6%,  therefore  divide  amt.  in  table  by  6. 

4  %  is  6  %  less  2%,  therefore  subtract  2  %  from  6  %. 

5  %  is  6  %  less  1  %,  therefore  subtract  1  %  from  5  %. 
7  %  is  6  %  plus  1  %,  therefore  add  1  %  to  6  %. 

11.    Explain  the  following,  using  the  printed  table. 


PKIN. 
900 

900 
70 
70 


TIME 

6  yr. 
2  mo. 
6yr. 
2  mo. 


INTEREST 

$334 
9 

25.20 
.70 

$358.90  I  nt.  at  6% 
$119.633  \  Tnt.  at  2% 

$478.533  ilii t.  at  8% 

12.    Explain  how  to  find  interest  at  9  %  from  the  table.     Find  the  interest  on  the  follow- 
ing : 

13.  $879  for  3  yr.  5  mo.  at  1%  17.  $ 642  for  5  yr.  at  4% 

14.  $672  for  2  yr.  3  mo.  at  2%  18.  $803  for  7  mo.  at  1% 

15.  $801  for  4  yr.  1  mo.  at  5%  19.  $810  for  13  yr.  at  3% 

16.  $8009  for  7  yr.  11  mo.  at  S%  20.  $19  for  5  yr  4  mo.  at  9% 


PROBLEMS   IN   INTEREST  83 

COMPLETION   OF   6%    INTEREST   TABLE   FOR  DAYS 

Compute  mentally  the  interest  on  -f  1,  $2,  up  to  1 10,  for  one  year  and  then  for  one  month. 
The  interest  for  fifteen  days  will  be  one-half  of  one  month.  By  this  means  the  column  for 
fifteen  days  may  be  computed,  and  since  some  of  the  squares  require  space  for  a  point  and 
four  figures,  it  should  be  written  in  columns  very  accurately,  decimal  points  exactly  under 
each  other,  and  with  small  clear  figures.  The  columns  headed  "  ten  days  "  may  be  obtained 
from  the  column  for  one  month  by  dividing  each  number  by  three.  Use  common  fractions 
only  in  the  fourth  place  from  the  decimal  point. 

8  005 

Interest  on  $1  for  1  mo.  is  $.005  or  5  mills.     Interest  on  $1  for  10  da.  is  -     -  or  $.001|,  or  If  mills. 

o 

PROBLEM  1.  — Read  the  interest  for  10  days  on  f  2,  $3  ...  $10  in  the  same  manner  and 
write  in  column. 

PROBLEM  2. — Complete  the  column  headed  15  days  by  calculating  from  the  column 
headed  1  month.  How  is  this  done  ?  Read  each  result  as  cents,  mills,  and  fractions  of  a  mill. 

PROBLEM  3.  —  Complete  the  column  headed  5  days  by  calculating  from  the  column 
headed  10  days.  How?  Read  results  in  terms  of  money. 

PROBLEM  4.  —  Verify  the  accuracy  of  these  columns  by  seeing  whether  the  10-day 
column  is  twice  the  5-day  column,  and  whether  the  15-day  column  is  three  times  the  5-day 
column. 

PROBLEM  5.  —  Complete  the  1-day  column  by  dividing  the  5-day  column  by  5.  Verify 
by  seeing  whether  10  times  the  1-day  column  gives  the  10-day  column.  Read  results  in  terms 
of  money. 


84  FAMILY  EXPENSE  ACCOUNT 

PROBLEM  6.  —  Complete  the  6-day  column  by  adding  the  1-day  and  5-day  columns. 
Verify  by  seeing  whether  the  result  is  \  of  the  column  headed  1  month.  Explain  why  this 
should  be  so. 

PROBLEM  7.  —  Complete  the  2-day  column  from  the  1-day  column.  How  ?  Verify 
from  the  6-day  column.  How  ? 

PROBLEM  8.  —  Complete  the  3-day  column  by  adding  the  1-day  and  2-day  columns. 
Verify  from  the  6-day  column.  How  ?  Read  each  result  as  mills  and  fractions  of  mills. 

PROBLEMS   IN   INTEREST,   USING   TABLES' 

Find  the  interest  at  6  %  per  annum  on  the  following : 

1.  $30  for  3  yr.  11  mo.  6  da.  5.    $941  for  4  yr.  5  da. 

2.  17  for  3  yr.  11  mo.  6  da.  6.   $82  for  6  yr.  1  mo.  1  da. 

3.  8731  for  3  yr.  11  mo.  6  da.  7.   -1709  for  1  yr.  5  mo.  2  da. 

4.  $841  for  2  yr.  5  mo.  3  da.  8.    $82  for  5  yr.  4  mo.  7  da. 

9.    Find  the  rate  of  interest  on  savings  and  calculate  the  interest  on  a  deposit  of  $  756 
for  5  yr.  4  mo.,  using  tables.     Consult  bankers  for  short  methods. 

10.  A  loan  of  $741  at  8%  extended  for  7  years  5  months  11  days.     How  much  interest 
was  due  ? 

11.  Find  the  rates  of  interest  paid  by  investments  considered  "  safe  "  by  reliable  business 
men.     Form  reasonable  problems  and  find  how  much  money  the  investment  will  pay  in  1  year. 
Consider  also  Postal  Savings  Bank  investments. 


Name 


Blank  for  Family  Expense  Account 
YEAR,  JAN.  191—  TO  JAN.  191— 


Date 


JAN.   FEB.  MAR.  APR.  MAY.  JUNE  JULY  AUG.  SEPT.  OCT.   Nov.  DEC.  TOTALS 


I.   Household :   1.  House  and  Lot  .     . 

2.  Taxes 

3.  Water 

4.  Electric  Light    .     .     . 
6.  Gas 

6.  Fuel 

7.  Garbage    

8.  Help 

9.  Laundry 

10.  Furnishings  .... 

11.  Insurance  against  debt 

II.    Food:  12.  Meat 

13.  Butter  and  Milk     .     . 

14.  Fruit  and  Vegetables 

15.  Eggs 

16.  Groceries 

III.  Family:       17.  Carfare  (Commute)    . 

18.  Accident  Insurance    . 

19.  Health      ..... 

20.  Incidentals    .     .     ,     . 

21.  Education     .... 

22.  Recreation    .... 

IV.  Edigion  :    23.  Church  and  Charity    . 

V.   Personal:    24.  Clothing  ..... 

25.  Pocket  Money  .     .     . 

VI.    Savings :      26.  Savings  Bank     .     .     . 
27.  Life  Insurance  .     .     . 
Totals 


Name 


Blank  for  Family  Expense  Account 
YEAR,  JAN.  191—  TO  JAN.  191— 


Date 


JAN. 


FEB. 


MAK. 


APR 


MAY. 


JUNE 


IULY 


AUG. 


OCT. 


Nov. 


DEC. 


TOTALS 


I.   Household :   1.  House  and  Lot  .     .     . 

2.  Taxes 

3.  Water 

4.  Electric  Light    .     .     . 
6.  Gas 

6.  Fuel 

7.  Garbage 

8.  Help 

9.  Laundry 

10.  Furnishings  .... 

11.  Insurance  against  debt 

II.    Food:  12.  Meat 

13.  Butter  and  Milk     .     . 

14.  Fruit  and  Vegetables 

15.  Eggs 

16.  Groceries 

III.  Family:       17.  Carfare  (Commute)    . 

18.  Accident  Insurance    . 

19.  Health 

20.  Incidentals    .... 

21.  Education     .... 

22.  Recreation    .... 

IV.  Religion  :    23.  Church  and  Charity    . 

V.   Personal:    24.  Clothing 

25.  Pocket  Money  .     .     . 

VI.    Savings :      26.  Savings  Bank     .     .     . 
27.  Life  Insurance  .     .     . 
Totals 


Name- 


Blank  for  Cash  Account  Book  Date. 


DATE 

PARTICULARS 

RECEIVE! 

> 

PAID 

Jan.  2 

Total 

Jan.  3 

Cash  Balance 

Total 

Jan.  4 

Cash  Balance 

Total 

Jan.  5 

Cash  Balance 

Total 

Jan.  6 

Cash  Balance 

Total 

Jan.  7 

Cash  Balance 

Total 

Name. 


Blank  for  Cash  Account  Book 


Date. 


DATE 

PARTICULARS 

RECEIVE 

9 

PAID 

Jan.  2 

Total 

Jan.  3 

Cash  Balance 

Total 

Jan.  4 

Cash  Balance 

Total 

i 

Jan.  5 

Cash  Balance 

Total 

Jan.  6 

Cash  Balance 

Total 

Jan.  7 

Cash  Balance 

Total 

Name 


Blank  for  Savings  Bank  Account 


DATE 

DEPOSIT 

TIME  TO  INTEREST 

CORRESPONDING     ,' 
DEPOSIT  FOR  1  MONTH 

^AcE^'BANK'-,    . 

Month 

Year 

Cents 

Cents 

Name 


Blank  for  Savings  Bank  Account 


Date 


<•    ^JL<J   'r 

DATE 

DEPOSIT 

TIME  TO  INTEREST 

CORRESPONDING 
DEPOSIT  FOE  1  MONTH 

BALANCE  IN  BANK 

"i  ^-  tl*slilj       • 

^,  • 

1   Month 

Year 

Cents 

Cents 

Name, 

No 


.191. 


Blank  for  Commercial  Bank  Account 
CHECKS  AND  STUBS 

BERKELEY,  CAL 


FOR. 


BAL.  BROT.  FORD. 
AMT.  DEPOSITED 

TOTAL 

AMT,  THIS  CHECK 
BAL,  CAR'D  FORD. 


DOLLARS        CENTS 


_       No.- 


THE  NATIONAL  BANK  OF  BERKELEY 


PAT  TO  THE 

ORDER  OF. 


.DOLLARS 


No.. 


To. 


FOR. 


.191. 


BAL.  BROT.  FORD. 
AMT.  DEPOSITED 

TOTAL 

AMT,  THIS  CHECK 
BAL.  CAR'D  FORD. 


DOLLARS        CENTS 


BERKELEY,  CAL.. 


-191-      No.. 


THE  NATIONAL  BANK  OF  BERKELEY 


PAT  TO  THE 

ORDER  OF_ 


-DOLLARS 


Name. 


.191. 


Blank  for  Commercial  Bank  Account 
CHECKS  AND  STUBS 

BERKELEY,  CAL 


Date. 


FOR. 


BAL.  BROT.  FORD. 
AMT.  DEPOSITED 

TOTAL 

AMT.  THIS  CHECK 
BAL.  CAR'D  FORD. 


DOLLARS        CENTS 


_      No.- 


THE  NATIONAL  BANK  OF  BERKELEY 


PAY  TO  THE 

ORDER  OF_ 


.DOLLARS 


No.. 


To. 


FOR. 


.191 


BAL  BROT.  FORD. 
AMT.  DEPOSITED 

TOTAL 

AMT.  THIS  CHECK 
BAL  CAR'D  FORD. 


DOLLARS        CENTS 


BERKELEY,  CAL. 


191- 


No.. 


THE  NATIONAL  BANK  OF  BERKELEY 


PAT  TO  THE 

ORDER  OF_ 


.DOLLARS 


Blank  for  Six  Per  Cent  Interest  Table 


DAYS 

MONTHS 

YEARS 

S 

1 

2 

3 

5 

6 

10 

15 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

1 

2 

3 

S 

1 



1 

2 

2 

3 

3 

4 

4 

5 



5 

6 

6 

7 

7 

8 

8 

9 

9 

10 

' 

11 

10 

$ 

1 

2 

3 

5 

6 

10 

15 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

1 

2 

3 

S 

DAYS 

MONTHS 

TEARS 

Blank  for  Payments  on  House  and  Lot 


DATE  OF  PAYMENT 

TOTAL  PAYMENT 

AMOUNT  PRINCIPAL 

AMOUNT  INTEREST 

BALANCE  DUB  ON  PRINCIPAL 

April  1,  '08 

$520 

00 

520 

00 

2080 

00 

Blank  for  Payments  on  House  and  Lot 


DATE  OF  PAYMENT 

TOTAL  PAYMENT 

AMOUNT  PRINCIPAL 

AMOUNT  INTEREST 

BALANCE  DUE  ON  PRINCIPAL 

April  1,  '08 

$520 

00 

520 

00 

2080 

00 

Blank  for  Payments  on  Mortgage 


DATE 

INTEREST 

PAID  TO 

PAID  ON  PRINCIPAL 

BALANCE  DUB 

1912 

1912 

11480 

00 

Sept.  1 

8 

34 

Oct.  1 

11 

66 

1418 

34 

Blank  for  Payments  on  Mortgage 


DATE 

INTEREST 

PAID  TO 

PAID  ON  PRINCIPAL 

BALANCE  DUE 

1912 

1912 

$1430 

00 

Sept.  1 

8 

34 

Oct.  1 

11 

66 

1418 

34 

UNIVERSITY  OF  CALIFORNIA  LIBRARY 


